As the 2024 presidential race intensifies between former President Donald Trump and Vice President Kamala Harris, Americans are keenly watching how the outcome might affect their wallets. With President Biden’s unexpected withdrawal from the race, both candidates are unveiling economic policies that could significantly impact banking regulations, personal finances, and the broader financial sector.
The Stakes: Four Key Areas of Financial Impact
The next president’s policies will likely influence several crucial aspects of the American financial system. Let’s examine four key areas where Trump and Harris diverge, and how their potential presidencies could affect your bottom line.
1. Banking Regulation: Deregulation vs. Oversight
Trump’s Stance: Advocating for a return to his 2018 deregulation policies, Trump aims to ease restrictions on small and medium-sized banks. His campaign emphasizes that these policies “ignited the greatest economy in history.”
Harris’s Position: While not explicitly addressing banking regulation in recent speeches, Harris’s voting record and the Biden-Harris administration’s push for “common sense” oversight suggest a continuation of stricter regulatory measures.
Potential Impact: Trump’s approach could lead to more flexible lending practices but might increase systemic risks. Harris’s policies could enhance stability but potentially limit credit availability for some borrowers.
2. Bank Fees: Consumer Protection vs. Market-Driven Pricing
Trump’s Approach: Based on his previous term, Trump may favor letting banks determine their fee structures, aligning with a free-market philosophy.
Harris’s Strategy: Building on the Biden administration’s efforts, Harris is likely to continue pushing for fee reductions, including caps on credit card late fees and bans on certain essential banking service charges.
Potential Impact: Under Trump, consumers might face more varied fee structures, while Harris’s policies could lead to more standardized, potentially lower fees across the banking sector.
3. Interest Rates: Presidential Influence vs. Federal Reserve Independence
Trump’s View: Controversially, Trump has suggested that presidents should have more say in setting interest rates, citing his business acumen as justification.
Harris’s Stance: Harris firmly supports the Federal Reserve’s independence, stating she would “never interfere in the decisions that the Fed makes.”
Potential Impact: While presidents don’t directly set rates, their appointments and public statements can influence market expectations. Trump’s approach could lead to more volatile rate environments, while Harris’s might maintain current norms of Fed independence.
4. Cryptocurrency: Embrace vs. Cautious Regulation
Trump’s Evolution: Despite initially calling cryptocurrency a “scam,” Trump now holds digital assets and his party platform promises to “defend the right to mine Bitcoin” and ensure self-custody of digital assets.
Harris’s Approach: While not making official statements, Harris’s campaign has indicated support for measures to grow digital assets, suggesting a cautious but potentially supportive stance.
Potential Impact: Both candidates seem open to crypto growth, which could lead to increased mainstream adoption and potential integration with traditional banking systems.
Broader Economic Implications
Beyond these specific areas, the next president’s policies will have far-reaching effects on the economy:
Fiscal Policy and Taxation
– Trump’s Plan: Likely to push for extending or expanding the 2017 tax cuts, potentially stimulating short-term economic growth but increasing the deficit.
– Harris’s Approach: May seek to increase taxes on high-income earners and corporations to fund social programs, potentially impacting investment strategies and corporate profits.
Trade Policy
– Trump’s Strategy: Likely to continue an “America First” approach, potentially leading to more tariffs and trade tensions.
– Harris’s Vision: May pursue more multilateral trade agreements, potentially easing global economic tensions but with varied impacts on domestic industries.
Housing Market
– Trump’s Focus: May emphasize deregulation to stimulate construction and lending.
– Harris’s Plan: Likely to push for increased affordable housing initiatives and potentially stricter lending regulations.
Preparing Your Finances for Any Outcome
Regardless of the election result, Americans can take steps to secure their financial future:
1. Diversify Investments: Spread risk across various asset classes to mitigate potential policy-driven market volatility.
2. Build Emergency Savings: Aim for 3-6 months of living expenses in a high-yield savings account to weather potential economic shifts.
3. Stay Informed: Keep abreast of policy proposals and their potential impacts on your specific financial situation.
4. Review Debt Strategies: Consider refinancing options or accelerating debt payoff in anticipation of potential interest rate changes.
5. Explore Digital Asset Options: Research cryptocurrency opportunities while maintaining a balanced, risk-aware portfolio.
The Road Ahead: Economic Uncertainty and Opportunity
As Election Day approaches, the contrasting visions of Trump and Harris present both challenges and opportunities for American consumers and investors. While the full extent of their policies’ impacts remains to be seen, being proactive and adaptable in your financial planning can help navigate the changing economic landscape.
Remember, presidential policies are just one factor in a complex global economy. By staying informed, diversifying your financial strategies, and remaining flexible, you can position yourself to thrive regardless of who occupies the White House come January 2025.
