The 2024 risk that trumps all others
Workers, employers, and investors are facing an uncommonly certain outlook for 2024 — until November. After that, it's uncharted territory.
Why it matters: Donald Trump is the great known unknown of 2024. If — and only if — he is elected president, the domestic and global repercussions will be seismic, will dwarf any other event of this year, and will only grow into 2025 as he actually takes office.
The big picture: Because the November election is such a large and looming date, it's going to be hard for anything to feel — or be — particularly important in comparison.
- Interest rates will tick up or down, a quarter-point at a time. Markets, similarly, will rise and fall. A divided U.S. Congress will pass nothing of importance. The wars in Ukraine and Gaza will continue. Probably there will be an extreme weather event or three. When it comes to non-Trump known unknowns, there's less scope for surprises than normal.
- Against that backdrop, a loud, fractious, and extremely expensive election campaign will increasingly dominate the attention of the general population, most of whom have already made up their minds who they intend to vote for — or, more to the point, vote against.
Between the lines: A second Trump term would be far more radical than the first, committed to stretching legal and governance boundaries and to pursuing retribution for the prosecutions he has been fighting since losing office. Domestically, many pillars of American democracy, including an independent judiciary and central bank, would be imperiled.
- Trump's protectionist and isolationist tendencies would also terrify NATO while creating an opening for China. As a global threat, he is unrivaled.
By the numbers: The probability of Trump ultimately winning the Electoral College has been stuck at a steady 40% on PredictIt; that number seems unlikely to budge meaningfully any time soon.
- That 40% number is high enough that it can't be ignored, but also low enough that it can't really be priced in, or a base-case expectation.
- Even if it rises to 50% or higher as Election Day approaches, we'll still be in broadly the same epistemic boat on November 4 that we're in today.
Be smart: The only way for the Trump risk to become manageable would be for him to not be a candidate. That's something which, while possible, is also quite unlikely.
The bottom line: It's reasonable to assume that the first 10 months of 2024 will be relatively — even unusually — calm. If a storm then arrives, there's no doubt whose name will be attached.