By Michelle Price, Carolina Mandl and Lananh Nguyen
WASHINGTON/NEW YORK (Reuters) – Many Wall Street executives have reservations about backing either candidate in the U.S. presidential election. They fear former President Donald Trump’s policies will hurt the economy, but wary Vice President Kamala Harris will lean too far to the left.
While several Wall Street heavyweights, including Bill Ackman, John Paulson and George Soros, have endorsed a candidate, many other senior executives are still weighing the economic policies at the heart of the hard-fought race and the implications for legal and democratic institutions, as according to conversations with two dozen executives in recent weeks.
Despite a track record of implementing Wall Street-friendly measures, Republican candidate Trump’s policies threaten to create economic and policy instability, many executives say.
While Harris would be a safe pair of hands, she has only been the Democratic nominee since late July, when President Joe Biden left the race, and remains a big unknown, they said. Many are concerned that the vice president will continue Biden’s regulatory crackdown on lucrative Wall Street firms.
The executives included Republican and Democratic supporters, including a handful who publicly support Trump or Harris, and others with no apparent partisan ties.
“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 industries.
“But they would like to better understand who Harris is and what she believes,” Mehlman said, adding that it did not appear that Harris’ economic speech on Wednesday had provided more insight for Wall Street firms.
As he did during his first presidency, Trump pledged to cut taxes and regulations, but most executives said the benefits could be offset by his planned tariffs, which could fuel inflation, while tax cuts could widen the U.S. budget deficit. Trump increased his planned tariffs in his 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 “sparked growth, reduced inflation and put more money in everyone’s pockets.” held’.
Billionaire investor and Trump backer Paulson told Reuters on the sidelines of a September event in New York where Trump laid out his economic plan that tariffs would boost revenues to help reduce the deficit.
Harris’ plan, which analysts predict would be better for the economy, calls for raising taxes, which would likely hit corporate profits and stocks but partially offset the expected increase in the deficit. She has said little on financial policy, but has touted her tough stance on banks as a former prosecutor and said she will continue Biden’s attack on hidden banking fees.
A Harris spokesperson pointed Reuters to messages of support from hundreds of economists and CEOs.
In an email to Reuters, billionaire entrepreneur and Harris backer Mark Cuban noted that stocks rose as corporate taxes rose, adding: “Anything that’s a step toward deficit reduction is a plus .” But he said both candidates are making promises they may not be able to keep. “Neither candidate’s policies include details on how they would be hired.”
For many companies, a Harris White House and a Republican Senate, which 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, according to data from nonpartisan donation tracker OpenSecrets. August 21.
These contributions, up to thousands of dollars, come from individuals and political action committees (PACs) and are not comprehensive as there are several other ways to use cash to support candidates.
STABILITY, POPULISM
In a nod to the policy whiplash and turnover of Trump’s first presidency, his felony conviction and his role in the Jan. 6, 2021, attack on the U.S. Capitol, some executives also worried that Trump would undermine democracy and the rule of law. Some raised concerns about his positions on Federal Reserve independence, immigration and abortion.
Michael Bright, chief executive of the Structured Finance Association, a Washington lobbying group that represents lenders and investors, said some of his members had become angry after Jan. 6 at Trump for his role in helping to overturn federal abortion rights when he became president . .
“I would say the financial services voters are pretty evenly split,” said Bright, who Trump nominated in 2018 to lead government housing company Ginnie Mae. Many will vote for Harris “with their hearts,” he added.
The role of populism in personnel choices was another theme. Several executives worried that Harris would remain with Biden’s progressive agency heads, though a few said they think she may be friendlier to the industry than Biden.
“She is practical and pragmatic,” said Jon Henes, Harris’ 2020 national campaign finance chairman and CEO of business advisory firm C Street Advisory Group, adding that Harris believes in sensible regulation that allows 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, although others think he would again choose traditional industry conservatives.
Trump’s appointment of Cantor Fitzgerald CEO Howard Lutnick as co-chair of his transition team could be a good sign, some said. Lutnick is tapping into his Wall Street network to staff a potential second Trump administration.
Lindsey Johnson, CEO of the Consumer Bankers Association, said Trump “can tap into a deep well of people who were in government last time and who have great 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 )
