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Walker Webcast: Despite Lack of Clarity on Election Outcome, Banks See Opportunities Ahead
The headline on a registration e-mailing for this week’s Walker & Dunlop webcast posited three possible scenarios for the morning after the polls closed in the national elections: “Status Quo, Blue Wave, or Red Surprise.” The actual result was some combination of the three, with the outcomes of many key races—notably the Presidential election—still up in the air.
“There isn’t a lot of clarity in our world right now” when it comes to the election outcome and the long-term implications for policy and the markets, said Peter Cook, chief communications officer of the American Bankers Association, on Wednesday’s webcast. If the elections did bring anything into stark relief, it’s that “this is a very divided nation.”
What is clearer for ABA members, though, is that banks feel pretty good about their current position—or rather, “as good as it could be, given the context of what we’re seeing right now,” said Cook.
The U.S. economy has rebounded to a remarkable degree from the depths of a “flash recession” brought on largely by the response to the COVID-19 pandemic. However, with some 11 million Americans still out of work, there’s a need for further stimulus spending by Congress, said Cayman Wills, global head of equities at JPMorgan Chase.
The timing of that next stimulus round, along with its size and scale, isn’t clear at the moment. “The next three months are going to be very interesting” in terms of policy, said Wills. Depending on the outcome of what remained a tight race between President Donald Trump and former Vice President Joe Biden as of Wednesday afternoon, “we’re either going to have a lame-duck President or a vindicated incumbent.”
Even if the Senate remains in Republican control, as looks increasingly likely, that doesn’t mean the same Senators will be calling the shots for the committees that shape lawmaking for that house of Congress. Cook noted that committee chairmanships are likely to rotate due to term limits for those chairmanships, and with new committee chairs can come changes in priorities.
Thanks in part to a regulatory framework “that has served the nation well,” banks in 2020 are more resilient than they were in the Great Recession, Cook said. Accordingly, they’re taking a longer-term view of the current situation.
“When we get a handle on the pandemic, there will be tremendous opportunity,” said Cook.
Replays of the Nov. 4 webcast are available by clicking here.
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
