Wall Street Executives Weigh Presidential Candidates

By Michelle Price, Carolina Mandl and Lananh Nguyen

WASHINGTON/NEW YORK (Reuters) – Many Wall Street executives have reservations about backing either candidate in the U.S. presidential election. They are concerned that former President Donald Trump’s policies will hurt the economy, while also being wary that Vice President Kamala Harris will lean too far left.

While some high-profile Wall Street figures like Bill Ackman, John Paulson, and George Soros have endorsed a candidate, many other senior executives are still considering the economic policies that are central to this tightly contested race and the implications for legal and democratic institutions, based on recent discussions with about two dozen executives.

Executives indicated that despite Trump’s history of Wall Street-friendly measures, his proposed policies pose risks of economic and policy instability.

Conversely, although Harris is perceived as more stable, her recent entry into the race has left many feeling uncertain about her stance; they worry she may continue President Joe Biden’s regulatory pressure on profitable Wall Street businesses.

Among the executives surveyed were both Republican and Democrat supporters, including a few endorsing Trump or Harris publicly, while others have no clear partisan ties.

Bruce Mehlman, a partner at Mehlman Consulting, noted, “Most expect Trump to continue where he left off, which is certainly more populist, protectionist, and aggressively deregulatory. But they’re eager to better understand who Harris is and what she believes.” He mentioned that Harris’ recent economic address did not provide much clarity for Wall Street firms.

Trump has promised to cut taxes and regulations in his new campaign, but many executives are concerned that these benefits might be countered by his planned import tariffs, which could induce inflation, and tax cuts likely to exacerbate the U.S. deficit.

Trump campaign National Press Secretary Karoline Leavitt remarked that Wall Street investors support Trump due to his previous policies that “fueled growth, drove down inflation, and kept more money in everyone’s pockets.”

Investor Paulson, who endorsed Trump, stated at a September event that tariffs would enhance revenues to mitigate the deficit.

Harris’ strategy, which could be more beneficial for the economy overall, envisages increased taxes that might lower corporate earnings and stock prices but could help reduce the deficit, according to analysts. Harris, previously tough on banks during her tenure as a prosecutor, has signaled continuity of Biden’s approach against hidden bank fees.

A spokesperson for Harris pointed to endorsements from numerous economists and CEOs. Billionaire Mark Cuban, a Harris supporter, argued that higher company taxes historically boosted stock markets, also emphasizing the importance of deficit reduction. He cautioned that both candidates have no detailed plans on how they would implement their policies.

Many in the corporate sector view a scenario where Harris occupies the White House with a Republican Senate—which would obstruct tax hikes and compel Harris to appoint moderates—as the most favorable outcome.

Contributions from donors associated with securities and investment sectors to the Biden/Harris campaign amount to $8.7 million, compared to approximately $3 million for Trump, as indicated by nonpartisan donor tracker OpenSecrets.

Disappointment over Trump’s presidency due to risks to democracy, along with his felony conviction and involvement in the January 6th Capitol attack, have also prompted some executives to reconsider their support.

Michael Bright, CEO of the Structured Finance Association, noted financial services voters are evenly divided, with some sentiment leaning towards Harris due to concerns over abortion rights during Trump’s presidency.

When discussing personnel selections related to populism, several executives feared that Harris might keep Biden’s progressive agency heads, although some believe she would be more industry-friendly than Biden.

Jon Henes, Harris’ national campaign finance chair in 2020, described her as pragmatic, advocating for sensible regulations that promote clarity and transparency in the financial industry.

Conversely, a populist Trump and Republican party might appoint inexperienced loyalists who hold negative views towards Wall Street, though some predict that Trump would return to staffing positions with traditional industry Conservatives.

The appointment of Howard Lutnick, CEO of Cantor Fitzgerald, as co-chair of Trump’s transition team indicates a potential focus on Wall Street connections for a possible second administration.

According to Lindsey Johnson, CEO of the Consumer Bankers Association, Trump can access a considerable pool of knowledgeable individuals from the previous administration who have expertise in finance.

(Writing and reporting by Michelle Price in Washington D.C.; Reporting by Carolina Mandl and Lananh Nguyen in New York; Additional reporting by Douglas Gillison, Tatiana Bautzer, Saeed Azhar, Laura Matthews, Pete Schroeder, Makailah Gause, and Megan Davies; Editing by Nick Zieminski)