Barraud’s Consistent Track Record and Focus on US Election
Christophe Barraud, a seasoned economist and chief strategist at Market Securities Monaco, is widely recognized for his predictive accuracy. Bloomberg has consistently ranked Barraud as the top US economic forecaster nearly every year since 2012, and he recently secured this top position again for the third quarter of 2024. Known for his data-driven approach, Barraud’s insights are closely monitored by key financial players, including hedge funds, banks, and pension funds. With the upcoming US presidential election, Barraud is focusing on the possible economic impact of the election’s outcome, particularly how the power balance in Congress will shape policy-making and economic trends.
In a recent interview, Christophe Barraud emphasized the significance of election-related uncertainty. According to him, economic growth in the US is expected to pick up after the election, regardless of who wins, as corporations are currently holding back on capital expenditures and hiring decisions. He forecasts US GDP growth exceeding consensus expectations, with 2024’s anticipated rate of 2.6% likely edging up to 2.7%, and 2025’s rate moving from 1.8% to around 2.1%. Barraud’s data suggest that this trend depends on how Washington’s political landscape is divided next year.
Three Possible Economic Scenarios Based on Election Outcomes
Christophe Barraud outlines three primary election scenarios, each with distinct economic outcomes. The first scenario envisions Vice President Kamala Harris winning with a divided Congress. In this case, he expects minimal policy changes, resulting in a relatively stable economic environment with growth continuing at a moderate pace.
The second scenario assumes a Trump win with a divided Congress. With this outcome, Barraud anticipates that Trump’s focus will pivot more toward foreign policy, particularly in areas related to trade restrictions and tariffs. While these policies could hinder global economic growth, their immediate effect on US GDP may be neutral. However, Christophe Barraud warns that long-term repercussions, especially retaliatory measures by other countries, could slow the US economy.
In the third scenario—Barraud’s most probable outcome—Trump wins the presidency with a Republican majority in Congress. This would allow Trump to enact tax cuts for corporations and households, stimulating domestic policy over foreign concerns. Barraud projects this scenario would generate a GDP increase in 2025, reaching between 2.1% and 2.3%. Yet, Barraud notes that this outcome also raises concerns regarding the US deficit, with possible revenue shortfalls potentially leading to an increase in the 10-year Treasury yield, especially if immigration restrictions fuel inflation.
Investor Concerns and Barraud’s Methodology
Barraud’s high-profile clients are expressing increasing concern about the US’s ballooning deficit, particularly if a Republican-led government pursues extensive tax cuts. If Trump’s policies are enacted, Barraud’s models project a potential jump in the 10-year yield to at least 4.5% shortly after the election, rising as high as 5% if a Republican sweep occurs. In contrast, a Harris win with a divided Congress could see yields drop as the market corrects its current pricing assumptions.
Barraud attributes his forecasting accuracy to his unique model-based methodology, which minimizes personal biases. His three-step process leverages the latest economic and financial data, backtests for predictive signals, and incorporates various models to refine projections. This election cycle, Christophe Barraud has also included insights from betting markets to enhance his analysis, providing clients with a well-rounded view of the potential economic shifts post-election.
