U.S. Republican National Convention Approaching
US political focus may currently be on whether President Joe Biden will remain in the contest for president, though the Republican National Convention which runs from August 15 through August 18 is rapidly approaching. This will give useful insight on what a second term for former president Donald Trump (which looks more likely than not to happen) would look like.
Currently betting odds suggest it is a close call as to whether Biden or his Vice-president Kamala Harris will be the Democratic candidate for president, with other candidates not ruled out but looking unlikely. Polls suggest that Biden has seen only modest damage from his disastrous debate performance, but given that he was slightly behind Trump going into the debate this is enough to justify concern. Polls are mixed, but do not convincingly suggest Harris would fare significantly better in a contest with Trump, leaving Trump as a clear front-runner.
Trump seems to be making an effort to show he will be more moderate than many fear if elected, distancing himself from Project 2025, a set of policy proposals from the Heritage Foundation which include replacing many career civil servants with loyalists to the Trump agenda.
The 20-point Republican Party platform for 2024 also looks less radical than some in the markets might fear, including no references to tariffs which we believe would not be a priority for Trump early in a second term, while noting his unpredictability. The first two items on the list concern immigration, the control of which seems likely to be his first priority. The economic agenda however looks likely to increase the budget deficit, advocating large tax cuts for workers and no cuts to Medicare or Social Security and that would put upward pressure on bond yields.
Trump’s choice for Vice-President could give an important signal. There appears to be a short list of three, North Dakota Governor Doug Burgum, Ohio Senator J.D. Vance and Florida Senator Marco Rubio, though a surprise cannot be ruled out. Burgum, aged 67, would probably be chosen for his administrative abilities while Vance, aged 39, would be a more likely choice should Trump be aiming to steer the Republican Party in his direction after his term ends. Rubio, aged 53, is probably the least likely of the three, though would be the most comforting for those looking for a traditional foreign policy, though clearly Trump rather than Rubio would set the agenda.