Talks around President Joe Biden’s pulling out of the presidential race have been getting louder over the past few weeks — and are picking up speed in the past few days, which could impact the economy.
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There are now 20 House Democrats and two Senate Democrats who have publicly called for him to step down, as CBS reported. Meanwhile, privately, high-levels party leaders, such as former Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Chuck Schumer (D-N.Y.) and House Democratic Leader Hakeem Jeffries (N.Y.), have had conversation with the president, according to The Hill.
Further underscoring the increasing concerns, a new July 17 survey by the AP-NORC Center for Public Affairs Research, found that “seven in 10 adults, including 65% of Democrats, say he should withdraw and allow his party to select a different nominee.”
Against that backdrop, if Biden were to pull out of the race, there could be ramifications in the financial world, rippling through the markets.
Here’s a look at what experts had to say about it.
Immediate Reaction: Increased Volatility
Several experts argued that were Biden to exit, markets would react with a lot of volatility.
“If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty, said Josh Thompson, CEO, Impact Health USA. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
According to him, the initial response could be a sharp decline in stock prices as investors seek to hedge against potential risks.
Michael Collins, CFA, founder and CEO, WinCap Financial, echoed the sentiment, saying that there could be increased uncertainty and volatility in the market due to a change in leadership, as a Biden withdrawal would almost guarantee a win for Trump.
“Investors may also react differently depending on who becomes the new frontrunner for the Democratic party and their perceived policies towards businesses and the economy,” he added.
“Could be Supportive of U.S. Equities”
Now, in terms of specific sectors, some experts argued that an exit could help…
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