Will Kamala Harris or Donald Trump be better for the economy? Here’s what 1 top Wall Street analyst says

As the US economy goes, so does the stock market. At least, that’s generally the case. When the economy is strong, corporate earnings tend to rise. And when earnings rise, stocks usually move higher.

With the presidential election approaching, many investors are understandably interested in how the policies of the two major candidates might affect the economy. Will Kamala Harris or Donald Trump be better for the economy? Here’s what a top Wall Street analyst says.

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The clear winner, according to Goldman Sachs

Goldman Sachs (GS -1.70%) is a financial services giant with operations around the globe. It is a leading investment bank and offers asset and wealth management services. Because of the intersection of politics and its business, the firm recently assessed the potential impact of economic policies proposed by Harris and Trump.

According to Goldman Sachs, there is a clear winner between the two based on how their policies would affect the US economy. I’m Kamala Harris.

The Wall Street firm estimates that under a Harris administration with Democratic control of Congress, jobs would grow by about 10,000 more per month than if Trump won with a divided Congress. A Harris victory would create 30,000 more jobs per month compared to a run in which Trump becomes president and the GOP controls both the Senate and the House of Representatives.

Goldman Sachs analysts also predicted that Trump’s economic plans would reduce gross domestic product (GDP) by about 0.5% in the second half of 2025. However, they believe that this negative impact on GDP will decrease starting in 2026.

Why the Wall Street firm views Harris’ policies more favorably

Vice President Harris has proposed economic policies including expanded child tax credits, bans on price increases, tax incentives for first-time home buyers and an increase in the corporate tax rate from 21 percent to 28 percent. She also recently called for raising the long-term capital gains tax rate to 28 percent for Americans earning $1 million or more and giving up to $50,000 in tax credits for new small businesses.

Former President Trump wants to reduce the corporate tax rate to 15%. He proposes tariffs of at least 10% on all imports with tariffs of 60% on imports from China. Trump also plans to reduce government regulations to help businesses. His idea of ​​a massive deportation of illegal immigrants could also have an economic impact.

Goldman Sachs likes Harris’ proposed spending initiatives and middle-class tax credits. The firm estimates that these plans would “offset slightly more than investments due to higher corporate tax rates.” The result, according to Goldman Sachs, is that a Harris administration with a Democratic Congress would give little boost to GDP growth in 2025 and 2026.

The Wall Street firm, however, has a negative view of Trump’s economic proposals. Goldman Sachs analysts wrote to investors earlier this week: “We estimate that if Trump wins either way or with a (divided) government, the impact on growth from tariffs and tighter immigration policy would outweigh the positive fiscal boost “.

What is the potential impact on investors?

Not everyone agrees with Goldman Sachs’ outlook. The Trump campaign responded to a question from Bloomberg: “These Wall Street elites would be wise to review the situation and acknowledge the shortcomings of their previous work if they want their new forecast to be seen as credible.”

Unsurprisingly, the Harris campaign liked Goldman Sachs’ analysis. He released a statement saying, “Vice President Harris has a positive vision for strengthening the economy by building the middle class, lowering taxes and lowering costs for working families and small businesses, and creating opportunities for all Americans to thrive.”

What is the potential impact on investors if Goldman Sachs’ opinion is correct? The easy answer is that it depends on who wins in November. However, the stock market has risen in the past under both Democratic and Republican administrations. For long-term investors, who occupies the Oval Office for the next four years won’t matter as much as the quality of the stocks they buy and how long they hold those stocks.