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Written by: Greg Valliere and Ling Han
Cut Bait
Many Republicans think the U.S. Federal Reserve (Fed) is attempting to influence the upcoming U.S. presidential election. Look for former Donald Trump to blast the Fed when the funds rate is cut this week, and when it likely moves again, a day after the November 5 election.
Trump was a proponent of easy money in his first term as president, when he berated Fed Chairman Jerome Powell for being overly restrictive on monetary policy. Now Trump thinks the U.S. central bank should reject a market-friendly rate cut.
Healthy Debate
There hasn’t been the same focus on healthcare this U.S. election cycle as there has been in the past, but some U.S. healthcare stocks could still be impacted by the result, including those managed care names that may be affected by potential changes to current government programs.
While the Democrats seem poised to continue with subsidies related to the healthcare insurance exchanges under the Affordable Care Act, Republicans may dial back subsidies, resulting in a loss of enrollees that has the potential to negatively impact Medicaid-focused managed care companies.
Meanwhile, insurance providers to the country’s Medicare Advantage program may be more adversely impacted by a Democrat victory given the cuts the current Biden administration has already made to the program over the past two years.
Related: Republicans Bicker Over Fed, Budget