Morgan Stanley: Fed will continue to print money regardless of the outcome of the US election
It is better not to confuse the declared position of candidates for the post of the president of the USA with their future actions, writes political expert of Morgan Stanley Michael Zezas. Regardless of the outcome of the election, the expert sees good prerequisites not only for further stimulus, which is financed by the Federal Reserve, but also for the adoption of a new package of financial assistance up to US$1 trillion. According to the bank's forecast, this will contribute to further growth of risky assets.
On the eve of 2016 presidential elections, the consensus view was that Donald Trump's victory would trigger a collapse of risky assets. The main mistake here was that people did not see the difference between pre-election promises and real government follow-up. Trump's administration implemented the pre-election promises in terms of tax cuts and deregulation, but did not fulfill them in terms of cutting government spending and rolling back health care reforms.
It only took a couple of hours for the markets to put together two and two.
In this election cycle, investors make similar mistakes, focusing on provocative statements from candidates and not thinking about their real policies if they win.