A Romney victory could spook the US markets - by Liam Halligan

Republican challenger Mitt Romney, meanwhile, is the choice of most men – or at least those who intend to vote. The outcome of this titanic struggle really is in the balance, not least in the likes of Ohio and Florida, the all-important “swing states”.

The normal assumption among financial analysts is that a Republican victory leads to a rally on America’s equity markets.

Right-wingers tend to be fans of lower taxation, particularly on businesses, and less inclined to regulate.

Of course the normal assumptions are far less likely to hold these days as we’re not living in normal times.

Were Romney to win, paradoxically, the US stock market could tumble. That’s because the former Massachusetts governor would be most unlikely to extend the tenure of Democrat-appointee Ben Bernanke as chairman of the Federal Reserve when his current second term expires in January 2014. That political reality would then cast doubt on Bernanke’s recently-issued pledge that the Fed won’t raise interest rates until well into 2015. 

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