Goldman Sachs wrote that a blue wave would "sharply raise the probability" of a fiscal stimulus package of at least $2 trillion shortly after the January 20 inauguration. Taken together, this spending "would at least match the likely longer-term tax increases on corporations and upper-income earnings," Goldman Sachs wrote. Goldman Sachs notes those battleground states "should finish their voting around midnight and could therefore resolve the uncertainty earlier than widely expected." Goldman Sachs said its analysis suggests a blue wave could pull forward the Fed's first rate hike by up to two years. "The rising probability of a blue wave," Goldman Sachs wrote, "adds to our sense that markets may have become too complacent about Fed policy."

Source: CNN October 06, 2020 16:07 UTC