He Predicted the Election – But What He Says About the 10-Year Treasury Will Leave You Speechless!

As the U.S. gears up for the upcoming election, all eyes are on the potential economic outcomes. Christophe Barraud, a renowned economist with an impressive track record, believes this election will have significant implications for the country’s economic growth and the 10-year Treasury yield. With his unmatched ability to forecast U.S. economic trends, Barraud’s insights offer a glimpse into what may unfold after the votes are counted.

Barraud, chief economist at Market Securities Monaco, has earned his title as the world’s most accurate forecaster. Bloomberg has consistently ranked him the top U.S. economist nearly every year since 2012. This year, as the stakes of the election grow higher, he has his focus set on how different political scenarios could shape the economy and, more specifically, the 10-year Treasury yield.

Growth After the Election – No Matter Who Wins

Barraud projects U.S. growth to accelerate once the election is over. “Uncertainty has spooked growth as corporations halted big decisions around capex and hiring,” he explained. Multiple factors, including union strikes and adverse weather conditions, have dampened economic momentum. However, Barraud is confident that the removal of uncertainty post-election will encourage growth.

He anticipates GDP growth in 2024 will slightly exceed expectations, rising from the consensus forecast of 2.6% to 2.7%. In 2025, while most experts predict a growth rate of 1.8%, Barraud expects it to come in closer to 2.1%. Despite the inevitable political shifts, he remains optimistic that the economy will benefit once businesses can make clearer decisions about investments and hiring.

Three Election Scenarios and Their Impact

Barraud lays out three possible election scenarios, each with distinct implications for economic policy and growth.

In the first scenario, Vice President Kamala Harris wins, but Congress remains divided. According to Barraud, this outcome will likely lead to a continuation of the status quo. Little change in economic policy means growth will remain steady but not overly remarkable.

The second scenario is a Trump victory with a divided Congress. Under these circumstances, Trump would face significant limitations in enacting tax cuts or making major domestic policy changes. Instead, Barraud predicts he would pivot toward foreign policy, particularly trade restrictions and tariffs. This, he says, could harm global growth and eventually backfire on the U.S. economy over the long term.

The final and most likely outcome, in Barraud’s view, is a Trump win paired with a Republican sweep of Congress. This would allow Trump to push through tax cuts for corporations and households, boosting U.S. growth in the short term. Barraud predicts that this scenario could drive GDP growth in 2025 to between 2.1% and 2.3%. However, the challenge of managing the national deficit could cause long-term problems.

The 10-Year Treasury’s Future

Barraud’s clients, including major banks and hedge funds, are particularly concerned about what the election outcome means for the 10-year Treasury yield. A Trump win, especially with a Republican majority, could result in a sharp increase in yields. Barraud expects an initial spike to 4.5% shortly after the election, with a potential gradual rise to 5% if tax cuts and labor market restrictions create inflationary pressures.

If Trump wins but lacks a majority in Congress, Barraud predicts a smaller increase, with yields rising by 15 basis points to around 4.35%. On the other hand, if Harris wins with a divided Congress, yields are expected to fall. This is largely because the markets have already priced in a Republican win, and any shift in that expectation would lead to a correction in Treasury yields.

A Data-Driven Forecasting Method

What makes Barraud’s predictions stand out is his rigorous, data-driven approach. His forecasting isn’t just based on gut feelings or political bias. Instead, he relies on a sophisticated model that incorporates economic, financial, and satellite data, combined with backtesting and inputs from various models. This multi-layered methodology allows Barraud to fine-tune his projections and identify potential risks.

A key part of Barraud’s process this year has been analyzing poll-betting markets with high user volume to get a clearer sense of potential election outcomes. While no prediction is foolproof, Barraud’s careful analysis of these data points has led him to make accurate forecasts time and time again.

In the world of economics, uncertainty is the only certainty. But Christophe Barraud’s predictions offer valuable insights into what we can expect from the election and its ripple effects on the economy. Whether it’s the impact on GDP growth or the trajectory of the 10-year Treasury yield, Barraud’s track record suggests that investors and policymakers alike should pay close attention to his forecasts.