The White House's recent confirmation that President Donald Trump was diagnosed with coronavirus (COVID-19) is an issue that warrants close monitoring in the days ahead. KResearch views that President Trump's illness may not affect his popularity as a Republican candidate for the US presidential election 2020 much because the contest is between two political parties with a completely different political platform. Therefore, Americans, who tend to have their own favorite political parties, may not change their mind on who to vote for. However, more undecided American voters may lean towards Mr. Joe Biden, the Democratic presidential nominee, following the first presidential debate. In addition, it is highly unlikely that Mr. Biden's supporters would switch to President Trump just because they are concerned about President Trump's health.
Meanwhile, KResearch assesses that a delayed US presidential election is unlikely. In US history, there has never been any event prompting a delay in the US presidential election. By law, the White House and the US President do not have the power to set an election date. The Constitution gives that power to the Congress. KResearch expects that the Democrats, which hold a majority in the House of Representatives, would oppose the postponement of a presidential election if proposed.
Although the news has caused jitters in the money and capital markets while risky assets were experiencing sell-offs, and the direction of US Dollar was mixed (down against the Japanese Yen, but up against other currencies), KResearch views that President Trump's health issue may not directly affect the Fed's monetary stance over the short-term. It is expected that the Fed would monitor the US presidential election results and may consider easing its monetary stance at an appropriate time should there be any political issues affecting the US economic recovery.
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