What a Biden-led Blue 'Tsunami' Means for the Financial System
Voice of Wall Street: This episode features Jaret Seiberg, Financial Services and Housing Policy Analyst for Cowen Washington Research Group
Quick Take: The financial system is bracing for the Presidential election and the policy changes that will follow. Dion Rabouin and Jaret Seiberg talk about the markets’ muted reaction to President Trump’s COVID-19 diagnosis, key policy initiatives that could result from a Biden or Trump victory, and how these changes could impact the wealth gap and financial inclusion. Seiberg also talked about Jerome Powell nearing the end of his term as Fed Chairman and speculated about who will take his place, even though Seiberg says Powell has been the MVP of the economy.
Top Quotes:
1) On a Democratic sweep in the election:
“The upside of that tsunami, though, could be that the business environment becomes more stable and more predictable. And that helps these on the commercial lending side. You know, we would expect a much larger recovery and stimulus bill to deal with COVID-19 in our blue tsunami scenario.”
2) On Jerome Powell as the economy’s MVP
“He isn't just the hero of Trump's reelection, he should be deemed the hero of you know, the economy. He has done more than any other Fed Chairman in history, to expand the central bank's role and to try to keep this COVID-19 crisis from becoming the second Great Depression.”
3) Larry Kudlow as the next Fed Chair?
“If Trump is reelected, we would expect the President would want to put in a political ally in that job. And, you know, there's plenty of possibilities out there. Well, we'll certainly have to see what happens whether it's Treasury Secretary Mnuchin whether it's Larry Kudlow on the National Economic Council.”
4) On the inevitability of the Central Bank launching a digital currency
“It is going to happen because there are processing advantages to having a digital currency. When you transact with a digital currency, you can send not just payment, but also instructions. And so for many forms of international trade and international payments, it's advantageous. I think central banks don't want the bitcoins of the world to dominate this space. They'd rather retain their own jurisdiction and authority by having central bank issued digital currencies.”
