Currently, the focus is on Arizona, Pennsylvania, Georgia, North Carolina, and Nevada, with the vote tallies favouring Biden over Trump at the moment. Voting will be extended due to counting for mail-in ballots, while legal challenges and potential court cases in states such as Michigan, Wisconsin, and Arizona by President Trump could further delay the result.
This is problematic in our view, as the US economy continues to face headwinds from rising COVID-19 cases, plunging incomes as unemployment benefits expire, and troubled state and local government finances risking further job and spending cuts. Furthermore, a prolonged legal battle risks increased partisanship within Washington that could make getting legislation passed through Congress much more difficult, even after the electoral dust settles. This could be the case going forward, as a Republican-controlled Senate and a Democratic-controlled House becomes increasingly more likely.