Big news in the US elections: President Joe Biden has decided not to run for re-election. He announced on Sunday that he's stepping aside for the good of the party and the country. This comes after a not-so-great debate performance that made people question if he could beat the Republican nominee, Donald Trump. Biden’s backing his VP, Kamala Harris, to take over the nomination.
So, What’s the Plan for the Democrats?
With Biden out, the Democrats need to officially nominate someone at their national convention on August 19 in Chicago. Biden had most of the delegates lined up, and his endorsement of Harris will probably carry a lot of weight. But, it’s not set in stone yet – other Democrats could still jump into the race before the official vote.
Why Harris?
Kamala Harris has a big advantage because she can use the funds already raised for the Biden-Harris campaign. Campaigns cost a ton of money, and switching to a new candidate would be expensive. Plus, Harris is already well-known and has significant support within the party. Picking someone else might also risk alienating key voter groups, especially women and people of color.
Has This Happened Before?
Yep, something similar happened in 1968 when President Lyndon Johnson decided not to run again amid Vietnam War protests. His VP, Hubert Humphrey, got the nomination but lost to Richard Nixon. Biden stepping down is a big deal, but it’s not unheard of in US elections.
What About Trump’s Chances?
With Biden out of the race, Trump’s chances of winning the US elections could improve, especially if the Democrats face a contested convention. Trump has a solid base and the removal of an incumbent might energize his campaign even more. His recent support for crypto and other policy shifts are playing well with certain voter segments.
How Will This Affect the Markets?
The stock and forex markets are likely to react to these political shifts in the US elections. If Trump appears more likely to win, we might see increased volatility. Investors generally prefer stability, and a change in leadership can cause uncertainty. For example, Trump's previous policies and stance on trade had significant impacts on market performance, and a potential return to those policies could unsettle markets again.
What's Next?
As the convention nears, Harris is in a strong position, but we'll have to wait and see if anyone else challenges her for the nomination in the US elections. It’s going to be an interesting few weeks for the Democratic Party! And keep an eye on the markets, as they will likely be quite reactive to these developments.
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