Opinion: Republican debate: Who won, who lost and what it means for markets

What’s more, the unanimity on display provided a clear contrast to former President Donald Trump, who skipped the faceoff for an interview with Tucker Carlson posted on X. Markets
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regularly were rattled throughout Trump’s presidency by the seemingly capricious nature of many Trump policy positions, strategies and tactics, including on trade policy and tariffs. Trump recently said he’d seek a 10% tariff on all non-U.S. goods entering the country.

Read: GOP debate highlights: Vivek Ramaswamy ‘sounds like ChatGPT,’ Chris Christie gets stuck with ‘the UFO question’ and more

Markets saw broad Republican candidate agreement on economic issues including: 

• The need to rein in debt, deficits and spending, about which markets are increasingly skittish amidst a more uncertain global economic picture.

• The commitment to attack and defeat inflation, a backhanded and implicit endorsement of current Fed interest rates policy, even though anti-Fed rhetoric has been de rigeur in Republican campaigns for 15 years. 

• Framing U.S. climate change policy as a gift to China at a time of economic and geopolitical competition, which strongly indicates an “all of the above” energy policy that boosts legacy fossil fuels.

• Supporting the 2017 tax law and by implication its looming extension, which is broadly positive for the economy.

• Reshoring American jobs, which boosts the manufacturing sector and beyond.

Politically, there wasn’t a major breakout by any candidate, and, with eight people vying for time and attention, an effective and clean breakout would be difficult to achieve.

It bears remembering that there are nearly five months to go before the first votes in the Iowa caucuses.  That’s a very long time in politics.  Races morph over time, and there’s a lot of time left for all these candidates to achieve a breakout.  The attack lines these candidates began to hone — both on Biden and Trump — now will begin to be repeated, and sink into the fabric of the early primary races. 

Still, there were a few clear winners and losers. 

The winner: Nikki Haley. 

• Haley deftly differentiated herself on many issues, both economic and social.  

• For markets, Haley called out Republicans, including those on stage, for contributing to and enabling runaway U.S. debt and spending.  In that way, Haley did more to address the increasing concern markets have about the sustainability of U.S. monetary and fiscal policy and provided a clue about which candidate might be most resolute in attacking those issues. 

• Haley also showed strength, resolve, a focus on solutions — “If you want something done, ask a woman” resonated well — and a comfort with the cut and thrust of a debate that occasionally veered close to organized chaos and candidates rhetorically pushed and shoved. 

Also read: Haley impresses, as Pence, Ramaswamy also score points

Loser 1: Vivek Ramaswamy.  

• The first debate “truth”, to use Ramaswamy’s hook, was that all the professional politicians onstage decided it was time to dispatch the amateur in the field. 

• They very likely did dispatch Ramaswamy, or at least stop any momentum he might have — and Ramaswamy helped.   

• Ramaswamy got tagged by the field as the “childish amateur” on the stage, a handle that is likely to stick in part because Ramaswamy played to that caricature.

• Ramaswamy also did himself no favors by showing himself as an outlier with the vast majority of Republicans, and the other candidates, on many issues, prominently including continuing Ukraine aid.   

• Overall, Ramaswamy presented himself as an overamped tech bro citing his energetically proclaimed views as “truth.”  It wasn’t a good look, and didn’t go over well in the hall, and likely not with likely primary voters.   

• Look for Ramaswamy’s minor momentum to stall: he’s not likely to continue in the top candidates tier much longer if his performance is a guide.  

Loser 2: Donald Trump, for five reasons.  

• First, Trump — the purported elephant in the room — was ignored until the second hour with the help of debate framing by the questioners, who chose to let the candidates shine and battle instead of creating or emphasizing a Trump shadow.  This allowed viewers to get a sense of all these candidates in a way that wouldn’t have been possible either with Trump physically present.

• Second, the mantle of Trump administration economic achievements was assumed by former Vice President Mike Pence and Sen. Tim Scott, both of whom had roles in the 2017 tax law, further minimizing Trump’s role in them.  

• Third, Trump’s decision not to participate in this debate is a confession of weakness, not strength or inevitability. Giving competitors two free hours to make themselves more plausible and electable candidates isn’t something any leader should be doing: a leader needs to attack and dispatch his competition.  Now, they’re all stronger.  

• Fourth, Trump can ill afford a misstep because his position is more precarious than most realize.  In early primary states like Iowa, Trump is not supported by roughly 60% of primary voters: the latest Iowa polls have Trump leading at 42%. Many of the GOP candidates gave early Republican primary voters another reason to take a second look at someone other than Trump.  If one or two of those candidates get support to coalesce, suddenly Trump’s position becomes one where the king is about to be knocked off.

• Fifth, Trump’s political death by 1,000 paper cuts continues this week. Trump’s surrender Thursday in Georgia will provide a stark contrast with the other candidates, and with Trump’s ability to campaign, much less lead, through his expanding legal challenges.  

And some candidates had, well, a meh night:

Florida Gov. Ron DeSantis, who didn’t hurt himself but got stronger as the night went on. The large number of candidates made it hard for DeSantis to break out, but he showed command later in the night on border security and economic issues.  Today, there’s likely no reason for anyone else to leave DeSantis, but there’s not a lot of reasons for voters to move in his direction, either. 

Scott, who didn’t get a chance to define his candidacy well until the closing remarks, but made up for it there with a strong and cohesive performance.  Scott remains a strong breakout candidate, and a likely top-liner by the time 2024 rolls around.    

One-party presidential debates are mostly tire-kicking and red meat for an already committed voting base, not precise indicators of the potential direction of national policy should one candidate become president.   

Despite that, the divisions on economic policy between the two parties got a lot clearer thanks to the first Republican debate.  That clearer choice is beneficial to, and for, markets and investors.  

Terry Haines is founder of Pangaea Policy, an independent policy and political forecasting and analysis company for financial markets.