Early Election Jitters: Bidens Debate Performance Shifts Interest Rate Outlook

Investors are usually slow to react to potential election outcomes, but this year, they seem to be factoring in the possibility of a Republican sweep in the upcoming election. This shift in sentiment, likely triggered by Biden`s poor performance in the first debate, has led to a rise in interest rates on 10-year Treasury securities.

Wall Street believes that a second Trump presidency, particularly with a Republican-controlled Congress, could lead to higher interest rates due to his policies, such as imposing new tariffs, which are considered inflationary. This comes at a time when inflation, although declining, is still a concern, and the Federal Reserve might be forced to reconsider interest rate cuts.