According to Odaily Planet Daily, JPMorgan Chase recently released a report emphasizing the potential impact of the US election on tax policy, government debt and market stability, providing guidance for investors.
Analysts at JPMorgan Chase pointed out that key provisions of the 2017 (Tax Cuts and Jobs Act) will expire in 2025, and Congress may re-examine tax policy. Failure to extend these measures could significantly increase taxes. The report said that if the temporary provisions in the TCJA expire, personal tax rates will return to higher levels, and all American households will see a 1.8% reduction in after-tax income, while the top 1% of earners will see a 3.1% reduction in after-tax income. JPMorgan Chase expects that both parties may push for at least a partial extension of the TCJA, but the specific details will depend on the election results.
Regarding the national deficit, JPMorgan Chase expects both Trump and Harris' proposals to increase the deficit, which could have an impact on bond yields. The report states that if all policy proposals become reality, the deficit could increase by $1 trillion under Harris and nearly $4 trillion under Trump over the next 10 years. Although debt concerns are obvious, JPMorgan Chase says some concerns may be exaggerated. The report explains that while the debt and deficit trajectory is a risk, some concerns are unfounded.
JPMorgan also talked about the possibility of an extended or disputed election, noting that it is difficult to say when the election results will be known and a clear answer may not be available for a week or two. If the election is close, expect to see court challenges and other legal actions by the end of the year. Analysts advise investors that stock market volatility tends to decline faster after the formation of a new government is confirmed, and stocks will move higher 12 months after the election. Don't let the election derail plans, and election results will not drive long-term market returns. JPMorgan analysts also predicted that Trump's victory could drive retail investors to risky assets, pushing up the prices of Bitcoin and gold.