Journalist: We’re talking about politics again, like two weeks ago. There’s a revolution in Washington. Joe Biden has stepped down after much undermining.
Q: They were important. Especially the televised debacle in the debate. But they were not enough on their own. Outsiders had to insist that she let go. Vice President Kamala Harris is now rushing to secure the nomination, and she is rushing donors.
GG: That Biden is no longer running is a done deal. That Harris will replace him is yet to be done.
Q: You face opposition within the party…
GG: The silence of leaders like former President Obama and others gives it away. Rumor has it that Schumer and Jefferies, key Democrats in Congress, will soon endorse her. They still need convincing.
Q: Can there be surprises?
GG: Harris has the advantage. Above all, because she doesn’t run, she flies. The deadlines are short. Changing the entire ticket would be a hassle, contributions would have to be returned. And no one has yet said they are determined to present an alternative candidacy.
Q: Which doesn’t mean I don’t evaluate it.
GG: Sure. But the time to decide is now. And, besides the fact that it will damage the party, the fight will not be easy. Harris has strong support and, at first glance, enough to win. Most likely, there will be negotiations and the differences will be smoothed out.
Q: What are the times like?
GG: There is less than a month left. The Democratic convention is from August 19 to 22.
Q: Washington is in turmoil. Wall Street hasn’t changed at all. Before the debate, after the debate. And after Biden’s step aside. It’s still in rally mode. Doesn’t it care about politics? Is it all the same? Have you already taken Trump’s victory into account?
GG: No one wins an election the day before, much less four months before, and without knowing who they are competing with.
Q: So then?
GG: As we said, the small things of politics are for the bonds. The stock market, what it does regularly, is charge a plus increase to election years. And in that sense we are doing well. That is already incorporated. And more than enough.
Q: Trump’s policies are highly inflationary (increasing tariffs across the board, extending tax cuts, etc.). And bonds are not responding to this either. Instead of climbing, the long-term rate has dropped half a point since the end of April.
GG: Understand two things. Trump is less interesting (and frightening) than the first time. He is already known as a president. His speech can be aggressive against the financial world. His management was not. Trump always measured his administration with the (rising) yardstick of Wall Street stock prices. He was careful not to push proposals that could torpedo them.
Q: The bull market was, in your opinion, proof of the success of your time in the White House.
GG: That’s what he said in real time. So his campaign announcements are taken with that filter. However, the reduction in the long-term rate that you mention does have to do with politics. With inflation, which has been silent since May, and with monetary policy. What is discounted is a cut in the Fed Funds rate in September. And the consequent turning of the page.
Q: Even though Trump warned the Fed not to begin tapering until after the election, which is not until November 5th.
GG: What Trump says about interest rates doesn’t matter. And even less so the candidate’s latest, most up-to-date version.
Q: The one who no longer preaches the firing of Jay Powell.
GG: After 100 days in office, Pete Navarro shouted. Instead, Trump now promises not to interfere, to let him serve out the remainder of his term at the head of the FED. As he did, noblesse oblige, with Janet Yellen (before appointing Powell himself).
Q: So we have Powell for a while.
GG: Until May 2026 at least.
Q: Why did you change your mind?
GG: Elementary, if he lowers the rate in September, and he will do that (even if they threaten him), he should continue doing so afterwards.
Q: When it is Trump’s turn to govern.
GG: If he wins the election, which he must do as well, it will never be easy if a lot of people turn out to vote, or if mistakes are made, from which no one is exempt.
Q: Like which ones?
GG: Luck is undeniable after the attack. But accepting a debate with Biden so early was a mistake in every way. Choosing JD Vance as a running mate now that the Democrats are rejuvenating the ticket may be another matter. And even more so if they nominate a woman. We cannot say that the campaign has just begun. And it left a trail of misfortune along the way. But this is defined in the last mile and what we see is only the warm-up.
Source: Ambito
