MW Yellen was no Hamilton - why one JPMorgan strategist blames Treasury chief for Harris loss

By Steve Goldstein

JPMorgan Asset Management chairman of market and investment strategy pointed out a string of positive economic indicators that Vice President Kamala Harris was not able to convert into an election victory:

-- Nearly a record high in the labor-force participation rate;

-- A surge in reshoring activity of U.S. manufacturing jobs;

-- Three-quarters of energy bill spending going into Republican districts;

-- The largest surge in manufacturing-related construction spending on record;

-- The highest year-to-date stock-market gains in an election year since 1936;

-- The Fed hiked interest rates without triggering a recession for the first time in 60 years.

With all that, Harris did worse than President Joe Biden did in 2020 in nearly every county in the United States, he noted.

"Starting with Alexander Hamilton, the Secretary of the Treasury position has typically been filled by people with financial expertise and with the political skills to sell a message to the American public and members of Congress, even when conditions weren't perfect," says Cembalest.

"You could not go anywhere in the 1990s without seeing, hearing or reading Bob Rubin on the achievements of the Clinton Presidency. The same goes for Don Regan and James Baker during the Reagan Presidency, and for Tim Geithner whose work on recapitalizing and restoring faith in the U.S. banking system was a hallmark of Obama's Presidency when Obama ran for a second term."

Where was Janet Yellen, he wondered. He charted Google Trends data to show that Yellen had a smaller media profile than even Steven Mnuchin, Trump's treasury secretary, who was largely unknown to the public before joining the administration.

"Is a former Federal Reserve chair and economics professor the most compelling, relentless and tireless advocate for an Administration's successes, and able to energetically explain away its failures on a variety of media platforms? Because that's what the job requires, particularly in 2024," he said.

As for the future, Cembalest says the key thing to watch will be the yield on the U.S. 10-year Treasury BX:TMUBMUSD10Y.

"The most important indicator to watch will be the 10-year Treasury, a bellwether for Trump's tariff/deportation/loose fiscal agenda vs the supply side benefits of a less regulated economy," he said.

The 10-year yield was 4.44% heading into Thursday's Fed decision.

-Steve Goldstein

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November 07, 2024 07:31 ET (12:31 GMT)

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