The U.S. 2024 presidential election has commenced, sparking discussions on its potential economic impacts. Experts suggest that the election outcome might not significantly influence the U.S. economy. According to Hu Jie, a professor at Shanghai Jiao Tong University and former senior economist at the Federal Reserve, the presidential transition typically has limited direct economic impacts, though it may affect certain industries temporarily.
Fiscal and monetary policies are often pivotal in shaping the financial environment. While the president can influence fiscal policies, such as budget proposals and industry preferences, the underlying economic resilience is largely determined by institutional, legal, and cultural factors beyond the administrative reach. Monetary policy remains largely under the independent control of the Federal Reserve, which can impact inflation and market dynamics.
The election result may alter leadership at the Federal Reserve, currently led by Jerome Powell, whose term ends in 2026. There is ongoing speculation over potential successors, with names like Lorie Logan, Christopher Waller, and Lael Brainard being considered.
Meanwhile, renowned investor Warren Buffett (Trades, Portfolio), through Berkshire Hathaway (BRK.B), continues to adopt a cautious investment approach. The company has significantly reduced its stake in Apple (AAPL, Financial) and remains a net seller of stocks for eight consecutive quarters. At the end of Q3, Berkshire accumulated an unprecedented $325.2 billion in cash and cash equivalents, reflecting Buffett's strategy to remain agile for future opportunities.
This conservative approach aligns with observations of the U.S. economy's steady performance, as indicated by the IMF's GDP growth forecasts and improving inflation rates. However, the stock market's advances largely rely on a few tech giants, leading to potential overvaluation concerns and adjustment risks. Buffett's tactic of holding cash reserves allows for strategic investments during market dips, emphasizing a prudent long-term outlook.
