As election day looms, Wall Street analysts are sounding the alarm over the potential for Kamala Harris's progressive economic platform to upend markets and spark rampant volatility.
Critics warn that a Harris presidency determined to reshape large swaths of the economy would create immense disruption across asset classes through radical shifts in fiscal and regulatory policy.
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They point to Harris's proposed tax hikes on corporations and the wealthy, along with her multi-trillion dollar spending plans for climate, housing and more as posing systemic risks. From siphoning funds away from share buybacks to unleashing an inflationary spiral that could force the Fed to hike rates aggressively, Harris's agenda represents a potential "market shockwave" that some investors may be underestimating.
A recent analysis by the Penn-Wharton Budget Model estimated Harris's tax policy could slash U.S. stock values by nearly 10% in the short-term alone as higher corporate taxes dent profits. And flooding an already liquidity-soaked economy with massive deficit spending could overwhelm the Fed's inflation-fighting tools, tanking both bonds and equities.
"With so much dry tinder from past stimulus efforts, the last thing markets need is another massive spark," one critic cautioned. "There are serious concerns the Fed could quickly lose control over price stability."
While Harris backers tout her plans boosting sustainable growth, addressing inequality and confronting climate change, skeptics warn of parallels to the disastrous mix of loose fiscal and tight monetary policies that set off 1970s stagflation.
For those worried about potential upheaval, one investment firm is offering an exclusive presentation on sector plays and hedging strategies to brace for the possible Harris shockwave...
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