Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
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Head of Fixed Income Strategy
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Robert F. Kennedy Jr wins the 2024 US presidential election
John J. Hardy
Chief Macro Strategist
Summary: In 2024, for the first time in the history of the USA, a third-party candidate, Robert F. Kennedy Jr, wins the US presidential election. His populist platform against the war-mongering Democrats and against the corporate elites resonates with both disgruntled traditional Democratic and Trump supporters. A new political era in the USA begins with the dramatic pivot away from plutocracy, as voters demand an end to drastic inequality and injustice and the end of forever wars.
As 2023 yields to 2024, recession begins to take hold in America, bringing with it a greater potential for a sea change in political attitudes. After four years of Trump and then four years of Biden, voter enthusiasm for the geriatric candidates wanes. Biden’s support continues to weaken as the economy and labor market go into a tailspin, even as inflation remains elevated. The public links Biden’s mismanagement of the geopolitical situation in Ukraine and the Middle East to soaring prices for oil, basic goods and rents. Meanwhile, Trump enjoys an enthusiastic political base, but his narcissistic posturing and erratic behavior see the ranks of his hard-core supporters dwindling.
Observers note the remarkable parallels with Robert F. Kennedy Sr’s pro-peace campaign in the 1968 election, when his popularity soared as he sought to win the Democratic nomination, before his campaign was cut short by an assassin’s bullet. RFK Jr’s anti-deep state stance echoes his uncle John F. Kennedy’s efforts.
Before the early 2024 recession, RFK Jr hardly seems even a dark horse to win the 2024 election, with polling showing around 15% of the electorate supporting him. But as the US works its way through a recession in the spring and summer, his support in the polls rises inexorably. Discontent with the incumbent Democrats rises to fever pitch. Meanwhile, Kennedy’s populist and isolationist message appeals just as much to less well-off Trump voters, with both sides able to join the RFK Jr movement as his ‘third way’ shatters the old psychology of being either fervently for or against one of the traditional two parties.
On 5 November election day, Kennedy wins the US presidential election with 38% of the popular vote, with Biden and Trump splitting the rest almost perfectly evenly. The Electoral College win is surprisingly dominant, as Kennedy polls best in much of former Trump country. A new era in US politics begins, as Congressional politics is shaken to the core, eliminating the previous dysfunction as Kennedy is able to build bipartisan coalitions with his policies.
Market impact: Kennedy’s pro-peace message and promise to end the abuses of the US healthcare system and break up excess corporate power sees defense, drug and healthcare companies nosedive, and the internet and info-tech monopolies trade nervously on concerns that a wider war against monopoly companies will follow.
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