On the First Trump-Biden Debate

Biden didn’t melt down in the first debate, and we expect he will now refuse to debate again. He outperformed expectations, but that will not move Trump voters to him. Trump’s pugnacity pushed back on the narrative that his campaign is doomed. Biden failed to contrast himself to Trump, acting just as pugnacious. Trump has hit on a counter to Biden’s narrative that he bungled the Covid-19 response: Biden would have been worse. But he failed to condemn white supremacists when asked, and he will be pilloried for it. With no decisive “Dukakis moment” from Biden, and especially if no more debates, markets will have to live with more uncertainty about whether to expect four more years of pro-growth Trumponomics.