The Coming Trump Energy Vacuum

We support protest. We condemn violence. We warned of a “chaos election” that would end in civil unrest, and we got it in an unexpected form. We don’t rule out more violence on inauguration day. None of this appears to be market-moving, though risk assets are still overdue for a correction. We don’t think the events of January 6 give Democrats a mandate they didn’t have before. If anything, focusing on impeachment squanders Biden’s honeymoon. Tax hikes are no more likely. “Stimulus” might be less likely. Trump is leaving the stage, very possibly tainted. This creates an energy vacuum, not the excitement necessary to power a legislative lurch. Conservative and moderate Democratic Senators in red and purple states will remain constrained by facing 2022 elections. Republicans will be able to realign, some embracing Trump’s tropes and legacy if they feel it is smart to do so, others who had to bear costs to oppose him can now just ignore him. The old duopoly is now free to reassemble.