Markets tend to rise after presidential announcements, according to Payne Capital Management President Ryan Payne.
It’s election day, and voters are still worried about how the outcome of the election will affect their finances. Issues such as retirement, housing affordability, inflation and mortgage rates are at the forefront of many voters’ minds.
Bankrate Senior Economist and Washington Bureau Chief Mark Hamrick said the key question that remains is whether the government will remain divided, “which begs the question: How much can any president-elect accomplish despite their promises and ambitions?” Hamrick said.
Inflation
Despite inflation and high prices being the main issue of the election, Hamrick noted that the president “has very little power to lower inflation.”
“That’s despite campaign promises that have sounded hollow when you look for details,” Hamrick said. “There is no protection inside the Oval Office to slow or stop inflation. If there was, the incumbent would take care of it.”
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Hamrick argued that it is important to respect the independence of the Federal Reserve, the central bank of the United States in charge of controlling inflation.
On the other hand, Hamrick argued that a sitting president “could do damage on the inflation front by providing too much fiscal stimulus or causing inflation with widely used taxes.”
Patchogue, NY: A For Sale sign hangs in front of a house in Patchogue, New York, on June 1, 2024. (Steve Pfost/Newsday RM via Getty Images/Getty Images)
Housing affordability/loan rates:
Housing affordability issues are “very market driven,” according to Hamrick. Given that, “there’s not much anyone can think of in terms of a policy that would help address the housing shortage combined with current mortgage costs,” he continued.
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Harmick said that while candidates from both parties often talk about “cutting red tape,” he noted that the main rules and regulations that hold back most housing developments come from state and local governments.
“At the same time, providing financial assistance to first-time home buyers can have the unintended effect of increasing the imbalance between supply and demand in the housing sector,” he said, adding that “massive evictions and taxing may add to already troubled jobs. shortages and increase the cost of construction materials, not helping those who want to buy.” houses.”
A “For Sale” sign on a house in Philadelphia, Pennsylvania, US, on Friday, Aug. 16, 2024. (Joe Lamberti/Bloomberg via Getty Images/Getty Images)
If inflation were to be fueled by external factors, which would likely lead to higher mortgage rates, then housing affordability would be a major challenge, he said.
Retirement:
This is another instance where candidates and many elected officials have promised that Social Security benefits will be protected, Hamrick said.
He noted that nothing concrete “has been put in place to ensure that the promised benefits are paid, given the upcoming fiscal deficit.”
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If there was a bipartisan agreement to strengthen Social Security funding, it would greatly increase retirement confidence, according to Hamrick.
But at the same time, individuals should also commit to their retirement savings by participating in employer-provided 401(k) plans and similar plans.
“Fiscal responsibility can often be helpful for the long-term viability of the federal budget but there aren’t many hands going up in that department these days among elected officials,” he continued.
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