Many Wall Street executives are worried about Trump, but fear Harris By Reuters

By Michelle Price, Carolina Mandl and Lananh Nguyen

WASHINGTON/NEW YORK (Reuters) – Many Wall Street executives are wary of endorsing either candidate in the U.S. presidential election, worried that former President Donald Trump’s policies will hurt the economy, but Vice President Kamala Harris is cautiously leaning too far to the left.

While several Wall Street players, including Bill Ackman, John Paulson and George Soros, have endorsed a candidate, many other senior executives are still weighing the economic policies central to the closely fought race and the ramifications for legal and democratic institutions, according to conversations with two dozen executives in recent weeks.

Despite implementing measures favorable to Wall Street, Republican nominee Trump’s policies threaten to create economic and political instability, many executives said.

While Harris would be a safe pair of hands, she has only been the Democratic nominee since late July when President Joe Biden dropped out of the race and remains a big unknown, they said. Many fear the vice president will continue Biden’s regulatory crackdown on Wall Street’s lucrative businesses.

The executives included Republican and Democratic supporters, including a handful who publicly support Trump or Harris and others with no obvious partisan affiliation.

“Most expect Trump to pick up where he left off, which is certainly more populist, protectionist and aggressively deregulatory,” said Bruce Mehlman, a partner at the bipartisan lobbying firm Mehlman Consulting with clients across all sectors.

“But they’re eager to get a better understanding of who Harris is and what she believes,” Mehlman said, adding that it didn’t appear Harris’ economic speech on Wednesday provided much insight for Wall Street firms.

As with his first presidency, Trump promises to cut taxes and regulations, but most executives said the benefits could be erased by his planned import tariffs, which could trigger inflation, while tax cuts could increase the US deficit. Trump upped his planned tariffs in comments this week.

Karoline Leavitt, the Trump campaign’s national press secretary, said in a statement that Wall Street investors want Trump to win because they remember his policies “fueled economic growth, reduced inflation and kept more money in everyone’s pockets”.

Billionaire investor and Trump supporter Paulson told Reuters on the sidelines of an event in New York in September where Trump presented his economic plan that the tariffs would raise revenue, helping reduce the deficit.

Harris’ plan, which analysts predict would be better for the economy, calls for tax increases, likely to hurt earnings and company shares but partially offset an expected widening of the deficit. She said little about financial policy, but expressed her tough stance on banks as a former attorney general and said she would continue Biden’s assault on hidden bank fees.

A Harris spokesman indicated to Reuters the support of hundreds of economists and CEOs.

In an email to Reuters, billionaire entrepreneur and Harris backer Mark Cuban noted that stocks rose when the company’s taxes were higher, adding: “Any step toward reducing the deficit is a plus.” But he said both candidates are making promises they may not be able to keep. “None of the candidates’ policies contain details of how they would be enacted.”

For many firms, a Harris White House and a Republican Senate that would block tax increases and force Harris to pick moderates for top jobs is the best-case scenario.

So far, donors tied to the securities and investment sectors have given $8.7 million to the Biden/Harris campaign, compared to about $3 million to Trump, data from nonpartisan donation tracker OpenSecrets showed on Aug. 21.

These contributions, limited to thousands of dollars, come from individuals and political action committees (PACs) and are not comprehensive, as there are several other ways to direct cash to support candidates.

STABILITY, POPULISM

In a nod to Trump’s whiplash and staff turnover in his first presidency, his murder conviction and his role in the January 6, 2021 attack on the US Capitol, some executives also worried that Trump it would undermine democracy and the rule of law. Some raised concerns about his positions on the independence of the Federal Reserve, immigration and abortion.

Michael Bright, chief executive of the Structured Finance Association, a Washington lobby group that represents lenders and investors, said that in addition to Jan. 6, some of its members have cheered on Trump because of his role in helping to topple federal abortion rights when he was president. .

“I would say the voters for financial services are pretty evenly split,” said Bright, whom Trump nominated in 2018 to lead the government’s housing agency Ginnie Mae. Many will vote “with their hearts” for Harris, he added.

The role of populism in personnel selection was another theme. Several executives worried that Harris would stick with Biden’s progressive agency heads, though a few said they believed she might be more industry-friendly than Biden.

“It’s practical and pragmatic,” said Jon Henes, Harris’ 2020 national campaign finance chairman and CEO of corporate advisory firm C Street Advisory Group, adding that Harris believes in sensible regulations that allow for transparency and certainty.

A more populist Trump and Republican party could choose inexperienced loyalists hostile to Wall Street to lead the agencies, some executives said, though others believe they would again choose traditional industry conservatives.

Trump’s appointment of Cantor Fitzgerald CEO Howard Lutnick as co-chairman of his transition team could be a good sign, some said. Lutnick is using his Wall Street network to hire a potential second Trump administration.

Lindsey Johnson, CEO of the Consumer Bankers Association, said Trump can “draw from a deep well of people who were in the administration last time and who have a lot of experience in the financial industry.”

(Writing and reporting by Michelle Price in Washington DC; Reporting by Carolina Mandl and Lananh Nguyen in New York; Additional reporting by Douglas Gillison, Tatiana Bautzer, Saeed Azhar, Laura Matthews, Pete Schroeder, Makailah Gause and Megan Davies; Editing by Nick Zieminski )