Our Hot Take on Last Night’s Presidential Debate

Democrats are quickly coalescing around a consensus that last night’s stumbling debate performance by Biden was disqualifying, and that Trump’s surprising self-control advanced his cause. Biden’s withdrawal as the nominee would have to be his own decision; his delegates are bound to him. If he is to stand aside, it will take time for him to do so, to distance such a decision from the embarrassment of last night. It’s too soon for markets to focus on which party will win in November. There are positives and negatives on both sides on economic policy, and the trade-offs will become clearer over time. In the meantime, Biden’s withdrawal will be an uncertainty event while it plays out, which could be discomfiting to markets. Harris is a non-starter as a replacement nominee. Obvious fallbacks Newson and Whitmer have no particular strengths. We dismiss speculation that Michelle Obama will be the nominee. Our quantitative model shows Biden or his replacement narrowly winning.