The people of America gave @realDonaldTrump a crystal clear mandate for change tonight
— Elon Musk (@elonmusk) November 6, 2024
Goldman’s chief economist Jan Hatzius provided clients, shortly after the official call by AP on a Trump win, the six main points of what this means in the political game in Washington, the economy, and markets:
- Media outlets have called the presidential election for Donald Trump, who looks likely to win 312 electoral votes. In the Senate, two Democratic-held seats (Ohio and West Virginia) have flipped to Republicans, giving Republicans the majority. The Republican candidate for the Democratic-held Montana seat holds a wide lead but with little vote reported so far, and Republican candidates lead narrowly in four additional Democratic-held seats (Michigan, Nevada, Pennsylvania, and Wisconsin). This likely gives Republicans at least 52 seats in the Senate, with a potential of 56 seats if margins in uncalled races hold.
- In the House, the outlook is still unclear but leans Republican. Thus far, media outlets have called two seats that have flipped, one Democratic-held and one Republican-held. A number of additional competitive seats have very narrow margins but have not yet been called. As the partial results stood at 2am ET on Nov. 6, the House margin looks likely to be very similar to the current 221R-214D composition (excluding vacancies), with the potential for small Democratic net gains but potentially not quite enough to take the majority. Prediction markets currently put the odds of a Republican sweep at around 90%. With many potentially decisive races in California where the vote could take several days to count, the House outcome might not become entirely clear until later this week or, possibly, next week.
- If Republicans win a narrow majority in the House, this would allow for full extension of the 2017 tax cuts that expire at the end of 2025, likely including reinstatement of some expired business investment incentives. We expect that congressional Republicans would support modest additional tax cuts to accommodate some of Trump’s campaign proposals, but expect these proposals would be scaled down and would cut taxes by a few tenths of a percent of GDP, primarily focused on individual income taxes (not corporate). In a Republican sweep, we would also expect federal spending growth to rise somewhat, particularly on defense. While a larger Senate margin (e.g. 55 or 56 seats) could result in greater Republican support for spending cuts in other parts of the budget (i.e., “mandatory” spending on benefit programs), the thin margin in the House might nevertheless pose an obstacle to such plans. By contrast, in the less likely scenario that Democrats win a very slim House majority, we would expect somewhat greater fiscal restraint as the modest net tax cuts we expect under a Republican sweep would be unlikely, and some of the upper-income tax cuts would be more likely to expire at the end of 2025.
- On tariffs, we would expect Trump to impose tariffs on imports from China that average an additional 20pp. While the 10-20% across-the-board tariff that Trump has proposed is not our base case, we believe it is very possible (40% chance) that such a tariff will be implemented. We expect auto tariffs to come into focus and we assume tariffs on auto imports from the EU, though this could be applied more broadly. We estimate that this combination of tariff policies would provide a one-time boost to core PCE inflation that peaks at 30-40bp and a modest drag on GDP.
- On immigration, we expect an incoming Trump administration will reduce immigration to around 750k/year, slightly below the 1mn pre-pandemic trend. In the event that Democrats manage to win a narrow House majority, we would expect immigration to decline less, to a pace around 1.25mn/yr. The difference arises from the greater enforcement funding a Republican-controlled Congress would likely approve that would be unlikely in a divided government scenario.
- On regulation, an incoming Trump administration would likely take a lighter-touch approach, particularly with regard to energy, financial, and labor policies. By contrast, while some aspects of antitrust policy might ease slightly, we would expect scrutiny of the tech sector to continue.
* * *
Update (Wednesday 0620ET):
Trump was elected the 47th president by the American people.
AP Race Call: Donald Trump is elected the 47th president of the U.S.
His win over Vice President Kamala Harris caps a historically tumultuous campaign that included two assassination attempts against him. https://t.co/vNyURdNHtn pic.twitter.com/QftQSSsDx9
— The Associated Press (@AP) November 6, 2024
Fox News declared victory for the former president hours ago, and now AP News has confirmed he successfully flipped the battleground state of Wisconsin. This battleground state win pushes his electoral votes over the 270 threshold, securing his return to the White House.
With votes still being counted, Trump might actually sweep most swing states.
The voting shift to Trump from 2020 is nationwide.
Here’s more on Trump’s election performance via Punchbowl News:
Trump’s stunning evisceration of the Blue Wall and Vice President Kamala Harris’ underperformance in all corners of the country has ushered in a new era for U.S. politics — a dramatic shift rightward.
Trump’s all-but-official victory is stunning in its completeness. The former president is on track to sweep all seven of the key battleground states, a huge reversal from 2020. Trump will even win the popular vote by millions of votes. He lost that badly in the last two campaigns.
CNN was shocked about Harris’ underperformance…
Jake Tapper shocked by map that shows that Kamala Harris did not out perform Joe Biden in a single county:
Jake Tapper: “Holy smokes! Literally nothing? Literally not one county?”Trump was the biggest winner tonight. Joe Biden 2nd biggest winner. pic.twitter.com/ECQD6WfEDL
— Eric Abbenante (@EricAbbenante) November 6, 2024
Punchbowl continued:
The Senate, as expected, has flipped to the Republicans. What’s currently a 51-49 GOP majority could dramatically expand with Trump-fueled victories. If the current numbers hold, Republicans could be looking at a 56-44 majority, the most in nearly a century. Not even the most optimistic Republicans predicted that they’d win seven Democratic-held seats.
Republican Bernie Moreno defeated Democratic Sen. Sherrod Brown in Ohio. Jim Justice won in West Virginia. GOP challengers are leading in Pennsylvania, Michigan, Wisconsin and Montana. In Nevada, don’t count out Democratic Sen. Jacky Rosen yet. But Republicans fended off challengers in Florida, Texas and Nebraska, dashing already-slim Democratic hopes of holding onto the Senate
This big Senate majority would give Trump a real chance to enact his agenda and get his Cabinet confirmed without major issues. Furthermore, Trump may be able to add to the 6-3 Supreme Court majority that he built from 2017 to 2021.
The battle for the House is still too close to call. Yet Johnson could fulfill his prediction and keep the House majority, giving Republicans a trifecta for the next two years.
Recapping on the takeaways from the race via NBC News…
- Latinos swing dramatically to Trump
- Harris gains with white women and college graduates
- The abortion issue wasn’t a panacea for Democrats
- The battle for the House is headed for overtime
And this.
🚨JUST IN: FOX News reporting that AP Votecast projects Trump winning a STAGGERING 23% of Black Men nationwide.
WATTERS: “A defeat for the mainstream media who’s just destroyed Donald Trump as a racist for all these years.”
WOW. pic.twitter.com/wve6T2JSER
— Western Lensman (@WesternLensman) November 6, 2024
“This election was Trump vs. Kamala, the Obamas, the deep state, the media, every major corporation, every celebrity, every musician, every university, all social media platforms (except this one), the RINOs, and even the Avengers,” Kyle Mann, Editor-in-chief of The Babylon Bee, wrote on X.
This election was Trump vs. Kamala, the Obamas, the deep state, the media, every major corporation, every celebrity, every musician, every university, all social media platforms (except this one), the RINOs, and even the Avengers.
And he won.
— Kyle Mann (@The_Kyle_Mann) November 6, 2024
‘We did it, Joe’…
History.
🚨 Donald John Trump becomes the first president since Grover Cleveland in 1892 to win back the White House in nonconsecutive terms.
You just witnessed history. pic.twitter.com/fsqDQ0qMFZ
— johnny maga (@_johnnymaga) November 6, 2024
Wow.
Scarborough: “This is the biggest red wave I’ve seen since Ronald Reagan’s 49-state victory in 1984” pic.twitter.com/5u5bCRUtJM
— Tom Elliott (@tomselliott) November 6, 2024
* * *
Presidential: Trump Wins
🇺🇸🇺🇸The future is gonna be so 🔥 🇺🇸🇺🇸 pic.twitter.com/x56cqb6oT5
— Elon Musk (@elonmusk) November 6, 2024
The future is gonna be fantastic pic.twitter.com/I46tFsHxs3
— Elon Musk (@elonmusk) November 6, 2024
Let that sink in pic.twitter.com/XvYFtDrhRm
— Elon Musk (@elonmusk) November 6, 2024
Harris has won California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine’s District 1, Maryland, Massachusetts, Nebraska’s District 2, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, and Minnesota.
Trump has won Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wyoming, Pennsylvania. Wisconsin, and Maine District 2.
Trump leads the popular vote by over 5 million – quite a massive swing for Republicans (what happened to the 81 million “Americans” that voted for Biden?)…
Of the seven critical battleground states, four have been called and both for Trump – Georgia, North Carolina, Pennsylvania, and Wisconsin – and he is leading in the others.
Republicans won control of the US Senate
…(flipping Ohio and West Virginia), giving them powerful leverage in high-stakes tax and spending battles ahead.
Key markets are positioning for a Trump victory.
The dollar strengthened, although it’s losing steam a bit now as traders take profits, and crude, copper and soybeans are softening.
Bitcoin (record highs), Ether and Dogecoin have all rallied.
Red Wave much? The shift to Trump from 2020 is very broad…
House: Republicans Lead
Top Harris aide Cedric Richmond tells attendees at the campaign’s gathering that the vice president won’t speak tonight.
“We will continue overnight to fight to make sure that every vote is counted, that every voice has spoken, so you won’t hear from the Vice President tonight but you will hear from her tomorrow. She will be back here tomorrow,” Richmond said.
The joy is gone😘
— Valentina Gomez (@ValentinaForUSA) November 6, 2024
2016 deja vu all over again, anyone?
* * *
What to watch for:
It’s all about the swing states – most notably Pennsylvania, where Donald Trump and Kamala Harris are virtually tied according to polls – so who actually knows.
1/ Pennsylvania is key for Harris to win.
2/ The best early indications for the presidential race might come from North Carolina and Georgia (key for Trump to win).
3/ Michigan, Pennsylvania and Wisconsin are likely to be the most important results to the presidential outcome but will take longer.
4/ Arizona and Nevada are likely to take the longest of the swing states.
The earliest results in most states will likely be dominated by early votes and mail-in ballots, with some states reporting these separately at the start of election night reporting, while others will report with partial election-day results, according to Goldman.
- For Harris, most obvious path is to win Michigan (15), Pennsylvania (19), and Wisconsin (10), netting the bare majority 270 electoral votes.
- For Trump, the most obvious path is to win the Sunbelt states of Arizona (11), Georgia (16), and North Carolina (16) and one of the Rust Belt states (any would be worth enough to reach 270).
In 2020 and 2022, early voting resulted in a shift to Democrats, however this year may be different – and might even slightly lean Republican, as early voting trends appear much more even based on party than in the past.
In larger counties, reporting is expected to take days vs. smaller counties.
Here’s Goldman Sachs’ expectations of how the night goes:
7pm ET
• 28 electoral votes lean toward Trump: Indiana, Kentucky and South Carolina
• 16 electoral votes lean toward Harris: Virginia and Vermont
• 16 toss-up votes: Georgia (16). In 2020, the AP first reported Georgia results at 7:20 p.m. ET7.30pm ET
• 21 electoral votes lean toward Trump: Ohio and West Virginia
• 16 toss-up votes: North Carolina (16). In 2020, the AP first reported results at 7:42 p.m. ET8.00pm ET
• 74 electoral votes lean toward Trump: Oklahoma, Missouri, Tennessee, Mississippi, Alabama, Florida and Maine’s 2nd Congressional District
• 78 electoral votes lean toward Harris: Illinois, Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, New Jersey, Delaware, Maryland and Washington, DC
• 19 toss-up votes: Pennsylvania (19). In 2020, the AP first reported results at 8:09 p.m. ET8.30pm ET
• Polls close in Arkansas, which has 6 electoral votes and is likely to support Trump. Polls will now be closed in half the states.9.00pm ET
• 73 electoral votes lean toward Trump, including Wyoming, North Dakota, South Dakota, Nebraska, Iowa, Kansas, Texas and Louisiana
• 54 electoral votes lean toward Harris, including New Mexico, Colorado, Minnesota, New York and Nebraska’s 2nd Congressional District
• 36 toss-up votes: Arizona, Wisconsin and Michigan (11, 10, 15, respectively)
In 2020, the AP first reported Michigan results at 8:08 p.m. ET (note Michigan runs two time zones; most of the state close at 8pmET, with rest at 9pm ET)
In 2020, the AP first reported Wisconsin results at 9:07 p.m. ET
In 2020, the AP first reported Arizona results at 10:02 p.m. ET10.00pm ET
• 10 electoral votes lean toward Trump, including Utah and Montana
• 6 toss-up votes: Nevada (6)
In 2020, the AP first reported Nevada results at 11:41 p.m. ET11.00pm ET
• 4 electoral votes lean toward Trump: Idaho
• 74 electoral votes lean toward Harris, including California, Oregon and WashingtonMidnight to 1am ET
• 3 electoral votes lean toward Trump in Alaska
• 4 electoral votes lean toward Harris votes in HawaiiHere’s when previous presidential election results were called:
According to prediction markets, a Republican sweep is the most likely outcome, followed by a divided Democrat win.
In the House, the generic ballot shows a much tighter race than we had a few weeks ago – an is in line with the notion that the party that wins the White House usually carries the House as well.
Earliest indications will come from Florida (13th District), Virginia (2nd and 7th Districts) and North Carolina (1st District), where according to Goldman, trends could become clear by 9-10pm ET. It may take until 11pm – midnight ET before further House races come into focus.
In the Senate, Republicans continue to maintain an advantage in both polling and prediction markets implying that two Democratic seats will likely flip, and a third (Ohio) has a slight chance of flipping to the Republicans, giving them either 51 or 52 seats.
That Ohio senate tossup should be decided tonight – as the state typically reports fairly quickly. The first vote counts should roll in around 8pm ET, and around half of the vote reported before 9:30pm, according to Goldman. If R’s win the seat, it would take the possibility of a Democratic sweep off the table.
Montana Senate results will likely take longer, as polls close around 10pm ET, and the state usually takes longer to count, reporting only 1/4 of its vote by midnight, and 1/2 by 2am ET.
Stay tuned for updates…
