Economic Uncertainty Looms Amid Biden's Re-Election Doubts

As doubts grow regarding President Joe Biden's re-election campaign in 2024, investors are evaluating potential economic impacts and market scenarios if a stronger Democratic candidate emerges. Bond yields rose post the first presidential debate. Market uncertainties are fueled by speculations around Biden's candidacy changes and potential economic policy shifts.

Speculation continues to mount over President Joe Biden's potential withdrawal from the 2024 re-election race, prompting investors to strategize for various economic scenarios. Rising bond yields and expectations of higher fiscal deficits and inflationary policies followed Biden's performance in the recent debate against Donald Trump. Market sentiments are fraught with more uncertainty as discussions and calls within the Democratic Party grow regarding Biden's continuation in the race.

Biden reaffirmed his intent for re-election in an ABC News interview, yet rumors of Vice President Kamala Harris potentially stepping in continue to circulate. Analysts predict minimal change in economic policy if Harris takes over but anticipate short-term market sell-offs driven by investor anxiety over uncertainties.

Stock markets have seen mixed reactions, driven by the potential implications of a Republican victory—a prospect perceived by some as favorable for lower taxes and deregulation but fraught with risks of higher tariffs and trade tensions. Investors are preparing for volatile times ahead as the election's political landscape continues to evolve.

(With inputs from agencies.)