Why I Think Donald Trump Is Most Likely To Win?
I recently gave an interview to Business Insider where I described my views about the U.S. economy and the most likely outcome regarding presidential election (Nov. 5). I was positively surprised that it became viral and quoted by many newspapers worldwide such as the New York Post, the Economic Times or the Daily Mail.
I received tons of requests from media, retailers and institutional clients about my forecasts and especially why I think Donald Trump is the most likely to win at that point. I hope this article will help everyone to better understand what I’m tracking.
As shown below, various indicators—including betting markets, polls, election forecast models, and financial markets—are now all trending in the same direction.
1- Betting Markets
As many of you already know, I’ve been a fan of betting markets since almost twenty years and that’s why I studied them in my Ph.D. I could be tempted to favor betting markets over polls to identify the potential winner of an election, but I rather see them as a complementary approach, especially in the case of a tight race.
What are they saying?
According to RealClear Politics (RCP), which aggregates quotes from several sites (BetOnline, Betfair, Betsson, Bovada, Bwin, Points Bet, Polymarket and Smarket), on average, Donal Trump has a 63.9% chance of winning the election.
This result looks somehow coherent with other sites I scrutinize, namely PredictIt and Kalshi. However, they point to a slightly lower probability.
2- Polls
It’s the old school method and is used by everyone. Contrary to the betting markets, if you don’t implement a model, you can’t directly extract the probabilIty of the outcome. As Bloomberg underlined “In a tight election, a small shift in national vote can change the probabilities quite dramatically. According to Columbia University’s Andrew Gelman, the statistician who runs The Economist’s model of the presidential race, a 10 percentage point move in probability is equivalent to a move of 0.4 percentage points in the predicted vote share.”
What is important is the spread between the two candidates and how it evolves to identify momentum. In this context, RCP also produces an average of polls. Latest data suggests Donald Trump is slightly ahead, with momentum building recently. Note that I also looked at selected polls (based on their past accuracies).
3- Election Modelers’ Forecast
Election modelers often combine data from various sources, including polling results, fundraising metrics, and economic indicators, while closely monitoring news trends or social media presence to estimate a candidate’s likelihood of success. Silver Bulletin is likely the most recognized name in this field. FiveThirtyEight’s model is also closely followed and currently has Trump winning in 52 out of 100 simulations (vs early October’s lean toward Harris in 56/100).
4- Financial Markets
A lot of variables can be used to check what market participants are expecting including prices of several stocks and macro variables.
a) Focus on Stocks
I mainly use two proxies to gauge investors’ sentiment. The first one is the price of Trump Media & Technology Group Corp (DJT US), which seems to be an obvious proxy. The stock has more than quadrupled since mid-September.
In addition, I also look at Goldman Sachs Election Policy Baskets. Since the beginning of October, Goldman Sachs’s basket of stocks set to outperform on a Republican victory has decisively overtaken its Democratic peer.
b) Focus on Macro Variables
A Trump victory is supposed to be associated with much more inflation than a Harris victory. This difference can be partly explained by his threats to implement tariffs, reduce immigration and offer tax cuts for both corporates and households. In addition, according to various estimates (including mine), his program should lead to a higher fiscal deficit.
In this context, most forecasters expect the U.S. 10-Year yield to rise in case of a Trump victory. The move could be significant if it’s coupled with a GOP clean sweep.
Latest price action suggests that this scenario is partly incorporated by market participants as the U.S. 10-Year yield has rebounded since mid-September in line with Trump’s chance of winning and DJT US. It came despite the Fed choosing to cut short-term rates agressively in September. Lastly, other variables such as Gold could be followed as it could be seen as a hedge against inflation.
Bottom Line
Keep in mind that probability isn’t certainty. A lot of things can still happen until the election, potentially leading to swings (follow my updates on X). However, as I have to construct a central scenario, I need to pick up the most probable outcome. Given latest level and momentum in polls, betting markets and financial markets, my conclusion remains that Trump is the most likely to win at that point. There is no political bias or advices here, just metrics’ reading and compilation, that you can do now on your side ;-).