After Republicans had a triumphal convention nominating former President Donald Trump and Senator J.D. Vance the political world was turned upside down with the announcement by President Biden that he would not accept the Democratic Presidential nomination and gave his support for the Presidential nod to his Vice President Kamala Harris.
The announcement immediately started speculation about the process and would the Vice President be able to step into the role of Democratic nominee. One of the first rules of politics is that you can’t beat somebody with nobody, and it’s hard to see any significant Democratic figure stepping up and challenging VP Harris. In my view in the coming week, the Vice President will solidify her role as Biden’s successor, and the focus of the Democratic Party will be on the pros and cons of different potential Vice-Presidential candidates.
Women of color have served in the House, Senate, and Presidential cabinet and advisor positions, but at the executive level there has never been a black woman elected Governor, and the election of Vice President Harris broke a barrier. With the growing role that women of color have in the Democratic Party it is hard to see any potential candidate risking their future in elective politics by attacking the sitting Vice President as unqualified. In my view she will be the Democratic nominee.
The Democratic convention will be held in Chicago August 19 – 22.
Vice President
Generally, it is accepted that the Vice President has little impact on the vote count. In recent political history the one potential exception that is often cited is Lyndon Johnson helping JFK carry Texas. In the end Kennedy won getting 50.52% of the vote, and support for their Texas Senator is seen as key to the victory. From Quayle, to Pence, to George HW Bush it is hard to argue that the VP had much of a role in the outcome. However, with the accelerated process that will unfold in the coming weeks, much attention will be focused on the process as Democrats finalize the choice of Harris as their nominee, and search for a VP who at minimum will do no harm.
Trump/Vance
Republicans had a hugely successful convention with total support for the Trump/Vance ticket. Ohio Senator Vance introduced himself to America with an introduction from his wife, and a speech that focused on the economic and foreign policy populism that President Trump has brought to the Party. However, having worked on campaigns there must be some disappointment among Republicans with the decision of President Biden to step aside, as the age issue may now fall on the Republican nominee who is 78 and would be 82 at the end of his term. This will compare with a Democratic nominee who is 59.
After the convention the Trump/Vance ticket had a huge rally in Michigan and demonstrated that while the Democrats will need to come together, the Trump base is energized and ready to go. The Republican Party does have a core of more traditional Party members such as former President George W Bush, former nominee Senator Mitt Romney, and former VP Pence who were missing from the convention and now it remains to be seen if the Harris ticket can win any of these Republicans over. Polling indicates that President Trump is having some success in winning over union members, minorities, and young people who have been important part of winning Democratic coalitions. The choice of a VP candidate by Democrats may impact this storyline in the coming few weeks.
Bottom line: a fluid political situation that we will be following.
Fed meets next week
The Fed usually has a quiet period prior to its rate setting Federal Open Markets Committee (FOMC) meeting which will occur next week on July 30/31. At 2pm next Wednesday the Fed will release its statement and at 2:30pm the Chair will hold his press conference. There seems to be increased support for the idea that the statement and press conference will strengthen the view that a rate cut is coming and may well be in September.
During the Chair’s recent Congressional testimony several Republican Members pushed Powell on whether it was appropriate to make rate decisions in the heat of an election campaign, and the Chair held firm that the decisions are not made with political factors as part of the process. The July statement could help calm concerns about politics and rate moves.
