Remember: Gridlock’s good. Or at least for markets.

Over the last several weeks, which is to say since Joe Biden bombed in the debate he asked for with Donald Trump, investors began to seriously ponder, and tentatively price, a “red sweep” scenario for the US election.

That meant, among other things, speculating about the fiscal read-through of an unchecked Trump: Unfunded tax cuts and the kind of no-cares, go-for-growth mentality that got Liz Truss into so much trouble, so fast.

As a quick reminder, I don’t like Trump as president, but he can live long and prosper as a private citizen for all I care. I don’t have any sort of personal grudge against him or anybody else for that matter. Not because I’m a friendly person (I’m avowedly not), but rather because I’m too self-absorbed to give a damn. In that regard, Trump and I have something in common.

It may not seem like it all the time, but I can assure you that my assessments of America’s domestic political situation are as unbiased as you’re going to find because, again, I genuinely don’t care. Not at the end of the proverbial day.

So, it’s without casting aspersions that I say the market’s concerns around giving Trump free fiscal rein are entirely justified. It’s not (at all) that people other than Trump are reliable stewards of America’s finances. Plainly, they aren’t. The opposite, in fact. Neither party has cared anything about fiscal rectitude in decades.

The problem with Trump and fiscal policy is the same as the problem with Trump and the military. Or the same as the problem with Trump and anything else. Namely, he’s Trump, and everything that entails. Even along vectors where having Trump as president might actually reduce the odds of bad outcomes, injecting him into the mix (any mix) is to introduce some chance, however infinitesimal, of the unthinkable.

That’s what worries people like me — people who might otherwise be mostly agnostic about Trump as president, setting aside concerns about his autocratic tendencies. It’s just very difficult to know what he might do at any given time. Even if you believe, for example, that Trump will avoid dragging the US into foreign wars 99 times out of 100, whereas any other president might only avoid such entanglements 80 times out of 100, the one time Trump doesn’t avoid a war could be a preemptive nuclear strike. Whereas the 20 times every other president doesn’t avoid a war, the result is “just” a multi-trillion dollar, two-decade bloody quagmire somewhere American troops have no business being.

The fiscal equivalent of that dynamic is (or could be) Trump waking up one day in 2025 and announcing, on the presidential Truth Social account, that “Tariff Man” has decided to eliminate all taxes, for everybody, and replace them with a 200% levy on all imports from China and an across-the-board 50% duty on everything America imports from everybody else. Or maybe he decides to sell bonds guaranteed by America’s oil and gas reserves and spend $10 trillion building his “Freedom Cities.” Or maybe the border wall needs to be plated in 24k gold. I’m just joking on those latter two, but you get the point: On any given day during a Trump presidency, the possibility set is canyon-wide.

Of course, saying something on Truth Social’s one thing and doing it’s another, but today’s GOP looks very different from the GOP during Trump’s first term. He’s managed to recast the party entirely in his image and the political will for Republicans to challenge him — on anything — is nonexistent. I heard one commentator last week describe Trump as a kind of MAGA Ayatollah — a mystic and a spiritual leader who, even as he leaves the specifics of policy to other people, retains something like a Supreme Leader’s unquestioned authority to set the overarching agenda.

Markets know all of that intuitively, even if traders can’t articulate it in exactly those terms. Hence the bear steepener sightings in recent weeks and other indications that traders are starting to internalize and grapple with a total Trump takeover, so to speak.

Whatever her odds of winning The White House (probably not as high as Democrats think they are) Kamala Harris at the top of her party’s ticket should at least reduce the risk to down-ballot Democrats and if nothing else, could help avert a worst-case outcome for Democrats in House and Senate races. Setting aside your own politics (and, more aptly, your own views of Trump) and looking at this situation solely as an investor, you probably don’t want Trump with no guardrails. Moderate Republicans are going extinct. America’s fiscal situation’s bad enough without letting Trump and — you know — a bunch of Marjorie Taylor Greenes decide how to borrow, tax and spend.

In brief remarks on Monday, Nomura’s Charlie McElligott wrote that stocks were “bullishly trading DC gridlock, as the downstream Democrat election odds in House races are being perceived as having greatly improved” following Biden’s decision to step aside over the weekend.

He also flagged potential relief for the US long-end. “Simply put, the most aggressive of Trump ‘fiscal over-stimulation / deregulation’ bearish outcomes for bonds” could now be “repriced lower” alongside reduced odds of a red sweep, McElligott said.

Again: Gridlock’s good. At least for markets.