Boaz Weinstein Says Biden Is Better for Bond Market Than Trump

(Bloomberg) -- President Joe Biden’s re-election would be better for the US bond market than a second Donald Trump presidency, Saba Capital Management’s Boaz Weinstein said during the Bloomberg Invest conference on Tuesday.

Most Read from Bloomberg

Biden is “less motivated by the stock market and more motivated by what’s good for America — on the subject of bonds,” said Saba’s founder and chief investment officer. “I’m not getting that political — just bonds.” He didn’t elaborate.

Bloomberg recently reported that Trump had proposed a broad increase in import tariffs, especially against China, as a way to offset tax cuts for households, during a meeting with House Republicans. Economists have warned that the 10% tariff plan would impose costs amounting to as much as $1,700 annually on middle-income families.

Former Treasury Secretary Lawrence Summers called it “a prescription for the mother of all stagflations” — a scenario with high inflation and unemployment combined with low economic growth, that would create a challenging backdrop for bonds.

While Weinstein contends that Trump’s unpredictable nature might invite expectations of volatility, he also noted that during his term in 2017, the VIX — Wall Street’s “fear index” — scraped historically low levels.

“We had Trump and we had Kim Jong Un and he was calling him ‘Rocket Man’, he was kind of taunting him, and I remember during Rocket Man — it wasn’t an Elton John reference right — at that moment, the VIX hit single digits,” Weinstein said. “It was at nine. I was crying because I’m a long volatility manager and the VIX literally hit nine. And so, the Trump presidency, if it happens, is going to be in many ways unpredictable.”

At the same time, he pointed out that “change generally means volatility” regardless of the election outcome. “So, it’s really reflexive to think, ‘OK, if Trump is elected there’ll be a lot of volatility’,” he said.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.