Because of the structure of the US electoral college system, this means Trump is currently on track for victory. “It is all about the swing states. Even if the polls are accurate, there is a very strong risk that Trump becomes president,” says Hardy.
Back in 2016, Trump won the presidency despite trailing Hilary Clinton by 2.1pc in the popular vote. Polymarket.com, a betting odds site, says there is a 61pc chance of a Trump victory, versus 39pc for Harris.
Economists warn that Trump’s economic agenda will be inflationary.
Trump has promised particularly aggressive increases in tariffs on foreign goods entering the country. He plans to introduce a charge of up to 20pc of the value of goods from other countries, and 60pc on imports from China. These charges would be paid by the companies importing the goods.
If imposed in their entirety, these tariffs could add nearly a whole percentage point to inflation while knocking 1.5 percentage points off GDP growth, according to Morgan Stanley.
On top of this, Trump has pledged to slash corporation tax rates from 21pc to 15pc for firms that make products within the US, scrap taxes on social security benefits, and roll out tax credits for companies purchasing heavy machinery.
He is also expected to scale back the power of financial regulators and unwind some of the reforms introduced in the wake of the financial crisis.
The Trump agenda is more likely to boost growth, but it will also be inflationary and erode fiscal credibility, says Hardy. “You’re running even larger, gaping deficits. And then what does the Fed have to do to keep things orderly?”
Interest rates on US government bonds are rising fast.
Yields on 10-year US Treasuries have jumped from 3.78pc at the end of September to 4.12pc, the highest rate recorded since July.