Harris victory seen as most likely election outcome, according to CNBC Fed Survey

• Some of the top U.S. economists and fund managers now believe Vice President Kamala Harris will win the November presidential election against Donald Trump, according to the latest CNBC Fed Survey.
• 48% of respondents forecast a Harris victory, while 41% see Trump winning the White House. The result marks a shift from late July's survey, when 50% of respondents said they expected a Trump victory, and only 37% believed Harris would be elected.
• More respondents in the September survey said they thought Trump would be better for the stock market and the economy, but that Harris would be better for the country as a whole.

For the first time in the 2024 election cycle, Vice President Kamala Harris is viewed as more likely than former President Donald Trump to win the U.S. presidential election, according to a CNBC Fed Survey released Tuesday.

The 27 respondents to the survey include investment strategists, economists and fund managers. Among the group, 48% see a Harris victory as the most likely scenario, while 41% believe Trump will win.

The survey was conducted from Sept. 12 to Sept. 14, several days after the first and possibly only debate between Harris and Trump.

The latest forecast marks a shift from the previous CNBC Fed Survey released in late July, when 50% forecast a Trump victory and only 37% believed Harris would be elected president.

The July survey was released nine days after President Joe Biden dropped out of the race and endorsed Harris.

The previous month, when Biden was still in the race, 48% viewed Trump as the most likely winner, while 35% forecast that Biden would be reelected. An additional 17% were unsure or did not know.

Ever since Harris jumped into the race unopposed in late July, her presidential campaign has been fleshing out the vice president's economic platform and policy proposals. With just under 50 days until the Nov. 5 election, the high costs of living remain the top issue for voters, according to national polls.

Harris has focused her economic pitch on growing the middle class and lowering consumer costs, including by providing housing subsidies, expanding tax credits and deductions, along with cracking down on what she sees as corporate "price gouging."

Meanwhile, Trump has championed extending and deepening his first-term tax cuts, imposing a hardline tariff policy on all imports and eliminating some of the Biden administration's infrastructure investments.

Fifty-six percent of respondents to the CNBC Fed Survey believe a Trump presidency would be better for the stock market than a Harris administration.

The forecasts shift when the question is about the broader economy. Here, 44% see Trump as a better candidate for the economy as a whole, vs. 41% for Harris.

"Assuming Trump intends to follow through on his proposals, a broad-based tariff and a mass deportation, or even a modest deportation of immigrants, would raise inflation and slow the economy to the extent that a recession would likely follow," said Joel Naroff, president of Naroff Economics LLC

Beyond purely economic issues, on the question of which candidate would be better for the country as a whole, 52% of respondents believe Harris would be, while only 37% see Trump as better overall for the United States.

"Assuming Trump intends to follow through on his proposals, a broad-based tariff and a mass deportation, or even a modest deportation of immigrants, would raise inflation and slow the economy to the extent that a recession would likely follow," Joel Naroff, president of Naroff Economics LLC, wrote in response to the survey.

"Other than that, the proposals of the two candidates differ largely on winners vs. losers, rather than their impact on overall economic growth," he added.

The respondents also forecast that Harris' economic proposals would be better for budget deficits and trade policy. They gave higher marks to Trump for how his policy proposals would impact business regulation, inflation, jobs and taxes.

Regardless of who takes the White House, the president's policy agenda only has partial influence over the health of the U.S. economy.

For some, that's a good thing. "Given the bad economic policies advocated by Trump and Harris, we really need to hope for divided government. Without it, the deficit and the inflation rate are both headed up," wrote Robert Fry, chief economist at Robert Fry Economics LLC.

Overall, the respondents ranked the presidential election the sixth most concerning risk to the U.S. economy out of eight possible choices. The top-ranked economic risk was the possibility of the Federal Reserve cutting interest rates too late, or by too little.

On the question of Fed independence, 100% expect Harris to respect the independence of the Federal Reserve. Only 42% believe the same of Trump.

"The independence of the Federal Reserve could be a real issue under Trump, but we have to realize there are only three branches of government outlined in the Constitution: the Legislative, Judicial, and Executive branches," wrote Richard Bernstein, CEO of Bernstein Advisors. "There is no fourth branch called the Fed, so the Fed has always been only as independent as the established three branches want it to be."

The Fed is expected to cut interest rates for the first time since March 2020 at its Wednesday meeting.

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