With only one week to go before the elections, the Harris bounce in the polls is fading, Rabobank’s Senior US Strategist Philip Marey notes.

Donald Trump or Kamala Harris?

“A Trump presidency would likely lead to a universal tariff and even higher tariffs on China. With support from Congress, he would cut taxes, deregulate the economy and reduce immigration.”

“A Harris presidency would be an extension of Biden’s policies with targeted tariffs on China, reducing health care costs and trying to cut taxes for the middle class, while raising them for the wealthy and corporations. However, two new Harris-specific policy plans focus on stopping price gouging in the food industry and dealing with the housing market shortages.”

“Simulations with a macroeconometric model suggest that Trump’s universal tariff would lead to a rebound in inflation. This could stop the Fed’s cutting cycle in its tracks. In contrast, Harris’ policies would lead to a continued decline in inflation to the Fed’s 2% target and allow the Fed to continue its cutting cycle next year.”