Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 28, 2026. REUTERS/Brendan McDermid
Economic journalist and author Hamish McRae reports that Wall Street is not so secretly praying for President Donald Trump to get toppled.
“Big money here in America will welcome it if Donald Trump is roughed up by voters in the US midterm elections, now less than two weeks away,” said McRae, who pointed out that news is focused on the size of Trump and Republicans’ drubbing and not its economic benefit to financial markets.
“The prospects here are almost certainly good – good for the U.S. of course, but on balance good for the rest of us too,” said McRae, citing two reasons.
Financial markets, he pointed out, almost always do well after the midterms. Sounds nuts, but share prices “almost always rise in the year that follows.”
“The basic answer seems to be that historically the party in control of the White House loses seats in Congress, and that curbs the power of the president. The result is dubbed gridlock – a time when it’s impossible to pass substantial legislation – but business likes gridlock because it stops politicians doing silly things that make it harder for them to make money,” said McRae.
The US has had two years of a pushy president and a “supine” Republican Congress. Losing control of the House destroys that relationship, he said. And markets are currently “jittery … for all the obvious reasons, so anything that helps calm things down would be a real bonus.”
Second, Trump has viciously attacked former Federal Reserve Board leader Jerome Powell. Sinc then, the Fed has “failed in its prime objective: holding inflation to 2 per cent.” Inflation is currently 3.7 per cent in the US, thanks to Trump’s high fuel prices, resulting from his unilateral attacks on Iran.
And a weaker White House means a stronger Fed, said McRae. “Politics doesn’t change economic fundamentals, but the combination of a weakened President and a stronger Federal Reserve means that the U.S. economy will be in better shape to scramble through the uncertain times ahead,” he said.
Plus, there’s a bubble brewing with AI — which is primarily the only aspect of the U.S. market that was doing well, at least until recently. Manufacturing, and other market issues, however, are still sagging. And eventually that AI bubble will pop, said McRae.
“Don’t assume this is immediately round the corner. However, the upward grind of rising rates from the Fed and higher yields from the bond markets also goes on a while. Eventually the US, like other governments around the world, will have to cut spending and/or increase taxes.
And the U.S. markets won’t be the only thing cheering Trump’s downfall, said McRae, adding that “what happens after the midterms has huge implications for the UK.”
We have broadly the same problems: rising inflation, high bond yields, a heavily-indebted government, and little political will to cut the deficit.
