US: Biden is regaining momentum – ABN AMRO

Bill Diviney, senior economist at ABN AMRO, notes that following a period where the Democratic presidential nomination was looking wide open again, support for Joe Biden appears to be gaining momentum in the run up to the primaries, with the Iowa caucus taking place on 3 February.

Key Quotes

“According to the Predictit.org betting website, the implied probability of Biden winning the nomination has risen to 43%, up from 27% this time last month. Bernie Sanders has also regained momentum, with a 32% probability of winning, up from 19%, following the decline in popularity of left-wing rival Elizabeth Warren. Opinion polling suggests Biden also has the best chance of beating Trump, although the race would likely be just as tight as in the 2016 election. Indeed, despite (perhaps even because of) impeachment proceedings against President Trump, his approval ratings have actually improved a little in recent months, from -12 points in early November to -8 points in the first few days of 2020, according to RealClearPolitics. Because of this, it is highly unlikely that Republican senators will vote to remove President Trump when Senate impeachment proceedings start in the coming weeks (Democrat senators do not have the numbers by themselves to do so).”

“The presidential election is due to take place a little under 10 months away, on 3 November. While president Trump’s approval ratings are currently somewhat worse than those of Presidents Obama and Bush Jr before their second term elections, it is historically rare for a president not to win a second term.”

“Typically, presidents fail to win re-election when there has been a recession – indeed, the last time this happened was with George Bush Sr. in the 1992 election, when the US was coming out of a recession. Given that as a base case we do not expect a recession in the US this year, it looks marginally more likely at this stage that President Trump wins a second term.”