Wall Street wary as Donald Trump-Kamala Harris election stirs economic concerns

Many Wall Street executives have reservations about backing either candidate in the US presidential election, worried that former President Donald Trump’s policies will hurt the economy but wary Vice President Kamala Harris will lean too far left.
While multiple Wall Street heavy-hitters including Bill Ackman, John Paulson and George Soros have backed a candidate, many other senior executives are still weighing the economic policies central to the closely fought race and the ramifications for legal and democratic institutions, according to conversations with two dozen executives in recent weeks.
Despite a track record implementing Wall Street-friendly measures, Republican candidate Trump’s policies threaten to create economic and policy instability, many executives said.
While Harris would be a safe pair of hands, she has only been the Democratic candidate since late July when President Joe Biden exited the race and remains a big unknown, they said. Many worry the Vice President will continue Biden’s regulatory crackdown on lucrative Wall Street businesses.
Among the executives were Republican and Democrat supporters, including a handful who are publicly backing Trump or Harris, and others with no obvious partisan affiliation.
“Most expect Trump to continue where he left off, which is certainly more populist, protectionist and aggressively deregulatory,” said Bruce Mehlman, partner at bipartisan lobbying firm Mehlman Consulting with clients in all sectors.
“But they’re eager to better understand who Harris is and what she believes,” Mehlman said, adding it did not appear that Harris’ Wednesday economic speech had offered more insight for Wall Street firms.
As with his first presidency, Trump is promising to cut taxes and regulations, but most executives said the benefits could be erased by his planned import tariffs which could spark inflation, while tax cuts could widen the US deficit. Trump ramped up his planned tariffs in comments this week.
Karoline Leavitt, Trump campaign National Press Secretary, said in a statement that Wall Street investors want Trump to win because they remember that his policies “fuelled growth, drove down inflation, and kept more money in everyone’s pockets.”
Billionaire investor and Trump backer Paulson told Reuters on the sidelines of a September New York event at which Trump outlined his economic plan that tariffs would boost revenues, helping to reduce the deficit.
Harris’ plan, which analysts predict would be better for the economy, calls for hiking taxes, likely denting company earnings and stocks but partly offsetting an expected widening of the deficit. She has said little on financial policy but has touted her tough stance on banks as a former prosecutor and said she will continue Biden’s assault on hidden bank fees.
A Harris spokesperson pointed Reuters to endorsements by hundreds of economists and CEOs.
In an email to Reuters, billionaire entrepreneur and Harris backer Mark Cuban noted that stocks rose when company taxes were higher, adding: “Anything that is a step towards reducing the deficit is a plus.” But he said that both candidates are making promises they may not be able to keep. “Neither candidate’s policies have any details about how they would get passed.”
For many firms, a Harris White House and Republican Senate, which would block tax increases and force Harris to pick moderates for top jobs, is the best-case scenario.
So far, donors tied to the securities and investment sectors have given $8.7 million to the Biden/Harris campaign versus about $3 million to Trump, data from nonpartisan donation tracker OpenSecrets as of August 21 shows.
Those contributions, capped in the thousands of dollars, come from individuals and political action committees (PACs) and are not comprehensive because there are several other ways to route cash to support candidates.
In a nod to the policy whiplash and personnel churn of Trump’s first presidency, his felony conviction and role in the Jan. 6, 2021 attack on the U.S. Capitol, some executives also worried Trump would undermine democracy and the rule of law. A few flagged concerns about his stances on Federal Reserve independence, immigration and abortion.
Michael Bright, chief executive of the Structured Finance Association, a Washington lobby group representing lenders and investors, said that in addition to Jan. 6, some of his members had soured on Trump due to his role in helping to overturn federal abortion rights when president.
“I would say financial services voters are split pretty evenly,” said Bright, whom Trump nominated in 2018 to run government housing agency Ginnie Mae. Many will vote “with their hearts” for Harris, he added.
The role of populism in personnel picks was another theme. Several executives fretted that Harris would stick with Biden’s progressive agency heads, although a few said they believe she may be friendlier to the industry than Biden.
“She is practical and pragmatic,” said Jon Henes, Harris’ national campaign finance chair in 2020 and CEO of corporate consultancy C Street Advisory Group, adding that Harris believes in sensible regulation that allows for transparency and certainty.
A more populist Trump and the Republican Party may pick inexperienced loyalists hostile to Wall Street to lead the agencies, some executives said, although others believe he would again pick traditional industry conservatives.
Trump’s appointment of Cantor Fitzgerald CEO Howard Lutnick as co-chair of his transition team may be a good sign, some said. Lutnick is tapping his Wall Street network to staff a potential second Trump administration.
Lindsey Johnson, CEO of the Consumer Bankers Association, said Trump can “draw from a deep well of people that were in the Administration last time that have great experience in the financial industry.”