Former Council of Economic Advisers Chairman Kevin Hassett warned the U.S. stock market is in for a “terrible” October ahead of the midterm elections, arguing on “Cavuto: Coast to Coast” Monday the uncertainty in Washington is “very scary” for voters.
KEVIN HASSETT: I can say as an economist, if you look at economic history, it tends to be the times when we have a divided government, the markets are happiest, and the policy is the most sensible because it’s only sort of sound ideas that can get enough votes from both sides to go through.
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And so, I would actually say that if Republicans capture the House within a few days of that, that would be about when the stock market would bottom. But October is going to be very, very scary. And markets can be a lot of volatility because people are going to be worried that it’s going to go this way or that way. And if there’s a little bit of good news for Democrats and people think that this really profligate spending and, you know, attacks on the supply side, that’s going to continue for two more years, that I think that the market’s going to have to think, well, the Fed’s going to lift rates to eight or nine percent because they’re the only game in town.
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And so, I actually think that we could have a really terrible October, and it will probably hit bottom if Republicans capture Congress.
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