What’s in store for the US economy when Joe Biden enters the White House?

Amid a boom in financial markets, there are still some clouds on the horizon, writes Hamish McRae

Joe Biden is inaugurated on 20 January (Copyright 2021 The Associated Press. All rights reserved.)

US politics may be catastrophic, but US finance is triumphant. The juxtaposition of Congress being trashed and US financial markets hitting a new high was stark evidence that whatever happens to its politics, big money is still backing the business of America.

The flood of money that hit the markets and elevated Elon Musk, founder of Tesla, to the status of the country’s richest person, is a vote of confidence in its economy. So will the boom continue under its new president, Joe Biden?  

In the short-term probably yes. There are a couple of specific reasons for that. One is an even looser fiscal policy. Now that the Democrats have won control of both houses of Congress, it will be easier for the new administration to get a further fiscal stimulus through. They have just passed a $935bn package, and it looks as though there will be at least another $1,400bn to come. This is big, even in terms of the $22 trillion US economy.