Election Risk To Economy


    One of biggest risk factors facing financial markets these days is the U.S. presidential election, says Clément Gignac, senior vice-president, chief economist, and chair of the asset allocation committee at Industrial Alliance Insurance and Financial Services. He told the Benefits Alliance Group’s ‘Taking It To The Next Level’ session on ‘The Economy and Capital Markets’ that while the polls suggest Hillary Clinton will win, it is not time to be complacent as a lot of things will happen over the next six months. He is optimistic that Donald Trump will not be elected, but a Clinton win could be less friendly to Wall Street and more friendly for Main Street. This, he said, could be an issue. He called the current risk of a U.S. recession “close to non-existent.” Despite sentiment to the contrary, all the indicators ‒ such as labour markets, housing starts, and inflation trends ‒ are in expansionary territory with no indication of a recession any time soon. While the recovery has been more modest than in the past, this is due in part to lower productivity which could be a result of an older population. An older population means lower productivity, he said.