The 2024 US election exemplifies the dynamic and often unpredictable nature of American democracy. In this week’s Bond Bulletin, we explore various potential election outcomes and their implications for the US dollar as November approaches.

What does this mean for fixed income investors?

The election outcome is binary and we can expect equally strong reactions in the US dollar, but in opposite directions. Before the election, we anticipate the US dollar to trade choppy but as the election approaches, changes in the implied probabilities of the election outcome are likely to have an increasing impact. In general, we believe the US dollar is in a medium-term down trend now that the Fed has started cutting rates. The US election has the potential to interrupt this trend, should a renewed expectation for more fiscal stimulus drive US yields higher, which would also boost the US dollar. We will be monitoring the market perception of these two relative factors—longer-term forces vs. short-term fiscal implications—into and around the elections.

About the Bond Bulletin

Each week J.P. Morgan Asset Management's Global Fixed Income, Currency and Commodities group reviews key issues for bond investors through the lens of its common Fundamental, Quantitative Valuation and Technical (FQT) research framework.

Our common research language based on Fundamental, Quantitative Valuation and Technical analysis provides a framework for comparing research across fixed income sectors and allows for the global integration of investment ideas.



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