Goldman Sachs provides an overview of the anticipated political climate in the United States for the year 2024, focusing on the presidential election, potential government shutdown, and key political issues. The analysis highlights the potential impact of these factors on financial markets and policy.
Presidential Election Dynamics:
- Former President Trump's early dominance in the primaries could quickly clarify the election landscape.
- Key early primaries in Iowa and New Hampshire will be pivotal, with South Carolina and Super Tuesday also crucial.
- Market uncertainty might persist until these primaries are resolved.
Risk of Government Shutdown:
- A government shutdown starting January 20th is a real possibility, with most funding extending only until February 2nd.
- Goldman Sachs estimates a two-week shutdown could marginally impact Q1 growth.
Key Political Issues for 2024:
- Uncertainty surrounds further Ukraine aid, with enactment this year appearing slightly less likely.
- Tax relief measures, including an expanded child tax credit and reinstated business tax cuts, face low odds of passing before the election.
- US-China relations are expected to remain tense, with potential new restrictions on trade and technology exports.
Goldman Sachs anticipates a year of high political uncertainty in the US during 2024, largely due to the presidential election and potential government shutdown risks. These factors, along with key legislative issues, are expected to create a dynamic and unpredictable environment, with implications for financial markets and policy decisions. The firm underscores the importance of closely monitoring these developments as they unfold throughout the year.