WASHINGTON (PNN) - November 6, 2024 - Goldman's chief economist Jan Hatzius provided clients, shortly after the official call by Associated Press on the President Donald J. Trump win, the six main points of what this means in the political game in Washington, the economy and markets:

1) Media outlets have called the presidential election for Donald Trump, who looks likely to win 312 electoral votes. In the Senate, two Democrat-held seats (Ohio and West Virginia) have flipped to Republicans, giving Republicans the majority. The Republican candidate for the Democrat-held Montana seat holds a wide lead but with little vote reported so far, and Republican candidates lead narrowly in four additional Democrat-held seats (Michigan, Nevada, Pennsylvania and Wisconsin). This likely gives Republicans at least 52 seats in the Senate, with a potential of 56 seats if margins in uncalled races hold.

2) In the House, the outlook is still unclear but leans Republican. Thus far, media outlets have called two seats that have flipped, one Democrat-held and one Republican-held. A number of additional competitive seats have very narrow margins but have not yet been called. As the partial results stood at 2:00 am ET on November 6, the House margin looks likely to be very similar to the current 221R-214D composition (excluding vacancies), with the potential for small Democrat net gains but potentially not quite enough to take the majority. Prediction markets currently put the odds of a Republican sweep at around 90%. With many potentially decisive races in Kalifornia where the vote could take several days to count, the House outcome might not become entirely clear until later this week or, possibly, next week.

3) If Republicans win a narrow majority in the House, this would allow for full extension of the 2017 tax cuts that expire at the end of 2025, likely including reinstatement of some expired business investment incentives. We expect that congressional Republicans would support modest additional tax cuts to accommodate some of Trump's campaign proposals, but expect these proposals would be scaled down and would cut taxes by a few tenths of a percent of GDP, primarily focused on individual income taxes (not corporate). In a Republican sweep, we would also expect federal spending growth to rise somewhat, particularly on defense. While a larger Senate margin (e.g. 55 or 56 seats) could result in greater Republican support for spending cuts in other parts f the budget (i.e., "mandatory" spending on benefit programs), the thin margin in the House might nevertheless pose an obstacle to such plans. By contrast, in the less likely scenario that Democrats win a very slim House majority, we would expect somewhat greater fiscal restraint, as the modest net tax cuts we expect under a Republican sweep would be unlikely and some of the upper-income tax cuts would be more likely to expire at the end of 2025.

4) On tariffs, we would expect Trump to impose tariffs on imports from China that average an additional 20pp. While the 10-20% across-the-board tariff that Trump has proposed is not our base case, we believe it is very possible (40% chance) that such a tariff will be implemented. We expect auto tariffs to come into focus and we assume tariffs on auto imports from the EU, though this could be applied more broadly. We estimate that this combination of tariff policies would provide a one-time boost to core PCE inflation that peaks at 30-40bp and a modest drag on GDP.

5) On immigration, we expect an incoming Trump regime will reduce immigration to around 750k/year, slightly below the 1mn pre-pandemic trend. In the event that Democrats manage to win a narrow House majority, we would expect immigration to decline less, to a pace around 1.25mn/yr. The difference arises from the greater enforcement funding a Republican-controlled Congress would likely approve that would be unlikely in a divided government scenario.

6) On regulation, an incoming Trump regime would likely take a lighter-touch approach, particularly with regard to energy, financial and labor policies. By contrast, while some aspects of antitrust policy might ease slightly, we would expect scrutiny of the tech sector to continue.

Trump was elected the 47th president by the Amerikan people.

Fox News declared victory for the president hours ago, and now AP News has confirmed he successfully flipped the battleground state of Wisconsin. This battleground state win pushes his electoral votes over the 270 threshold, securing his return to the White House.

With votes still being counted, Trump might actually sweep most swing states.

The voting shift to Trump from 2020 is nationwide.

Here's more on Trump's election performance via Punchbowl News:

“Trump's stunning evisceration of the Blue Wall and (Communist pretender) Kamala Harris' underperformance in all corners of the country has ushered in a new era for Fascist Police States of Amerika (FPSA) politics; a dramatic shift rightward. Trump's all-but-official victory is stunning in its completeness. Trump is on track to sweep all seven of the key battleground states, a huge reversal from 2020. Trump will even win the popular vote by millions of votes. He lost that badly in the last two campaigns.”

CNN was shocked about Harris' underperformance.

Punchbowl continued, “The Senate, as expected, has flipped to the Republicans. What's currently a 51-49 GOP majority could dramatically expand with Trump-fueled victories. If the current numbers hold, Republicans could be looking at a 56-44 majority, the most in nearly a century. Not even the most optimistic Republicans predicted that they'd win seven Democrat-held seats.”

“Republican Bernie Moreno defeated Democrat Senator Sherrod Brown in Ohio. Jim Justice won in West Virginia. GOP challengers are leading in Pennsylvania, Michigan, Wisconsin and Montana. In Nevada, don't count out Democrat Senator Jacky Rosen yet; but Republicans fended off challengers in Florida, Texas and Nebraska, dashing already-slim Democrat hopes of holding onto the Senate.”

“This big Senate majority gives Trump a real chance to enact his agenda and get his Cabinet confirmed without major issues. Furthermore, Trump may be able to add to the 6-3 Supreme Court majority that he built from 2017 to 2021.”

“The battle for the House is still too close to call, yet Johnson could fulfill his prediction and keep the House majority, giving Republicans a trifecta for the next two years.”