[Click eStock] "November FOMC to Calm US Election Aftershocks... Rate Cut Certain"

Post-Election Volatility Expected to Be Low... Shallow Corrections on Declines
FOMC Meeting Anticipated to Act as Market Buffer

As the 2024 U.S. presidential election approaches on November 5, the financial market has entered a phase of increased volatility. Currently, stock prices are declining, while interest rates and the dollar are on the rise. Some experts refer to this situation as the "Trump Trade," but the greater factor at play is the caution stemming from awaiting the election results.

Moon Nam-jung and Moon Geon-woo, researchers at Daishin Securities, stated on the 1st, "Until November 6, the U.S. stock market is expected to lose its leadership in the global market and experience increased volatility," adding, "Experts predict that unlike in the past, the 2024 U.S. presidential election will not cause significant volatility after the results are confirmed but rather a manageable, shallow correction."

According to Daishin Securities, there are three reasons why the aftermath of the election is expected to be mild. First, both Trump (Republican) and Harris (Democrat) are predictable figures within the market's forecast range. Second, volatility related to the possibility of a Trump victory has already been priced into the financial markets. Third, the November FOMC meeting (local time November 6-7) is scheduled after the election, which is also expected to influence the market.

Researchers Moon Nam-jung and Moon Geon-woo said, "The November FOMC is expected to act as a remedy to calm the aftershocks caused by the U.S. presidential election results," noting, "According to the CME FedWatch Tool, a 25bp (1bp=0.01%) rate cut is priced in with a 96.1% probability." The Federal Reserve is likely to pursue a rate cut and emphasize a policy of easing financial conditions, which is expected to serve as a buffer for the stock market.

This content was produced with the assistance of AI translation services.