Markets have never loved one-party control of Congress and they are relieved at the US election result, a Wall Street wealth manager says
- Market participants have never liked one party having control over both the executive branch and the legislative branch of government, which is why they are relieved, according to a Wall Street wealth manager.
- President-elect Joe Biden's plans to raise corporate taxes won't be easy because he would find it hard to get congressional approval, Eric Diton, managing director at the Wealth Alliance, told Business Insider in an interview.
- The Georgia runoff elections in January are yet to determine the fate of the Senate, but it's highly unlikely Democrats would win the two required votes.
- "The implication of having more gridlock in Washington is going to be that
marketswill look to the Fed to fill that void," Diton said.
The 2020 election outcome is not final yet but any chances of a Democratic sweep have faded as Republicans are poised to take control of the Senate.But the markets are relieved as they don't prefer one party having control over both the executive branch and the legislative branch of government, according to Eric Diton, managing director at the Wealth Alliance.
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The October stock market pullback right before the election was a result of market concern over Biden's tax agenda, he said. There was actually widespread relief that the Democrats lost seats, and that there is now closer balance in the house with a slightly Republican Senate.After Democrats fell short in several Senate races on November 3, both of Georgia's US Senate seats are headed for runoff elections in January.
Political gridlock would mean that the Federal Reserve may intervene in fiscal policy measures.
"The implication of having more gridlock in Washington is going to be that markets will look to the Fed to fill that void, so I think the Fed will take more action in the markets whether it means more lending, more open market bond purchases," Diton said."If it sees that the
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