The GOP seems to be on its back foot heading into the midterm elections and that has the party nervous. The political bombing attempts and the synagogue horror have both sent Trump’s approval rating sharply lower. Now the party is worried that pre-Trump Republicans in affluent suburbs may not show up to vote, which is making them worry they may lose more ground than forecast. According to polls, this group of affluent long-term Republicans has a lower overall interest in the midterms, which may sap much needed votes against the more motivated Democrats.

FINSUM: This is a problem in itself, but the fact that the midterms have become so much of a referendum on Trump at the same time as his approval rating is falling is not a good sign for the party.


President Trump has been complaining about the Fed’s hawkish behavior for several months. However, yesterday he seemed to escalate his discontent into something more specific. He told the media that he “maybe” regretted appointing Powell to lead the Fed. He said he was intentionally signaling the Fed that he wanted lower interest rates, but he acknowledged that the Fed was an independent entity. When pushed about the circumstances under which he would fire Powell, the President declined to comment.

FINSUM: Investors should keep an eye on whether Trump escalates his rhetoric into action. We doubt he will do anything about the Fed in the near term, but the market would certainly have a big reaction.


One of the things that has become transparent on the midterm campaign trail this Autumn is that the Republican tax cut of last year has not proved a big selling point with voters. Many voters in high tax states are frustrated with the near elimination of SALT deductions. However, Trump is responding to the frustration with a new pitch he debuted on Saturday in Nevada—that a big new tax cut is coming for the middle class in the next few weeks. Treasury secretary Mnuchin confirmed the new middle class tax plan, which Trump called “a very major tax cut”.

FINSUM: The lack of a SALT deduction is really hurting Republicans in some critical voting areas. This seems like a plan to win some of them back.

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