How Trump’s Rising Election Odds Is Stirring Up an Unseen Storm Across Global Markets
Trading Volatility On The Rise
Donald Trump's rising odds on betting platforms have sent ripples through stock markets worldwide, with investors bracing for potential economic shifts. Reports suggest a widespread sell-off of bonds globally as Trump gains 53.3% odds against Kamala Harris, with a 2.4% increase in the last 24 hours. This led to a volatile investment climate as concerns loom over Trump’s fiscal approach.
Bond Market Jitters
“Concerns about the fiscal outlook have become more acute,” explains Robert Dishner, senior portfolio manager at Neuberger Berman. U.S. Treasury bonds are being sold off as Trump’s odds rise, affecting international bonds as well. On Tuesday, the 10-year U.S. Treasury yield surged to 4.22%, marking its highest point since July. Similarly, the yield on 10-year German securities is at its highest since early September. This upward trend extended to Asia, with the yield on Australian benchmark debt rising by up to 16 basis points.
$1B Bets on Trump’s Win
Polymarket bettors currently give Trump a 53.3% win probability, generating over $1 billion in trading volume. As Election Day nears, this betting activity showcases investor confidence in Trump’s odds. This surge in legal betting follows a federal appeals court decision earlier this month permitting KalshiEX LLC, an online betting platform, to establish an election prediction market, NPR reported.
Mystery Trump Mega-Bettor
A Polymarket user, 'Fredi9999,' holds over 7.8M Trump shares, valued at around $6.4M. This high-stakes investor has boosted Trump’s market odds and stirred conversation. Some traders have speculated that Fredi might be Elon Musk or someone associated with him. Although these claims lack evidence, the substantial investment raises the question: “Who is this backer?”
Economic Shake-Up Warnings
J.P. Morgan strategists Jay Barry and Srini Ramaswamy discussed the effects of a Democratic or Republican sweep, noting that either outcome would lead to fiscal expansion compared to a divided government. Strategists predict a sharper bond market reaction if the GOP wins, as Trump’s economic policies are expected to increase the national debt by $7.5 trillion, compared to $3.5 trillion under Harris’s proposals.
Betting Raises Concerns of 'Mass Destruction'
Critics argue that betting on elections could undermine democratic integrity. Drawing parallels to the 2007–2008 recession, reports suggest that Warren Buffet’s warning about derivatives as 'weapons of mass destruction' highlights the risks of speculative betting, suggesting that unchecked prediction markets could introduce destabilizing effects similar to those that once upended the financial system.
Betting vs. Polls
While Polymarket favors Trump, traditional polling shows a close race. This divergence points to a unique unpredictability in election forecasting, as both bettors and pollsters anticipate the outcome. Some observers question if 'deep-pocketed players' are influencing market odds, with Polymarket officials investigating these claims, according to USA Today.
