David Kelly, Chief Global Strategist of JPMorgan Asset Management, said that if Trump wins the US election this week, the Federal Reserve may suspend its loose policy as early as December. This is because Trump's expansionary fiscal policy plan will push up inflation and prevent interest rates from falling.
Kelly pointed out that if the Republican Party wins a landslide victory in Trump's victory, there will be more expansionary fiscal policies, which may trigger a trade war, expand the deficit, and lead to higher interest rates.
On the other hand, Kelly said that if Vice President Harris wins, the economy may continue its soft landing trajectory. In this case, the Federal Reserve may stick to its expected loose policy path.