📰 Two Must-Knows Before Your Finance Interview: U.S. Elections and Interest Rates

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Estimated read time: 5 minutes

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Alright, if there are two things you have to stay on top of before stepping into a finance interview, it's the U.S. elections and the current interest rate landscape. Why? Because they shape the global economy and drive the decisions made at top banks, asset managers, and even startups. Nail down these topics, and you’ll stand out as someone who “gets it.” Let’s dive in.

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The U.S. Elections: Beyond Politics—Why They’re Essential for Finance

The U.S. elections are around the corner, and that isn’t just a headline. Elections bring policy changes, market swings, and global shifts that everyone in finance watches closely. So why does this matter for your interview? Here’s what you need to know:

Economic Policy Impacts
Each candidate has their own playbook for taxes, regulation, and government spending. Policies on spending and taxation can either fire up the economy or cool it down. For example, if a candidate pushes for major government spending, that can boost GDP growth short term, but may also fuel inflation and add to national debt, pushing up borrowing costs over time. The reverse is true if there’s a push for tax cuts and deregulation, which often means more immediate market growth—especially for sectors like tech, healthcare, and manufacturing.

Pro tip for your interview: pick one sector affected by these policies (think energy or tech) and connect the dots on how election outcomes could impact that sector. It shows you’re not just keeping up but thinking critically.

Trade and Foreign Relations
The U.S. is the global economic heavyweight, so when it makes moves on the world stage, it affects everyone else. U.S.-China trade relations, for example, are a big one to watch. Tensions can disrupt global supply chains, raise import prices, and impact corporate earnings. How might that impact, say, the tech industry, which relies on components from Asia? Bring this kind of thinking into your answers to show you get the big picture.

Federal Reserve Appointments
Here’s a nuance most people miss—the election can shift the makeup of the Federal Reserve, which ultimately influences interest rates. Candidates and their parties have opinions on who should hold these key roles. More “dovish” (pro-low rates) appointments might mean cheaper loans for businesses and consumers, which boosts spending and stock prices. “Hawkish” picks lead to higher rates to combat inflation, which can cool the economy but strengthens the dollar. This is exactly the kind of insight banks want to see from candidates who understand the deep link between politics and the economy.

The Interest Rate Landscape: Why It’s Front and Centre

Interest rates are the silent force behind nearly every financial decision. With inflation still top of mind globally, central banks have kept rates high. Here’s what that means for finance interviews and how to use this knowledge to show you’re ready for the big leagues.

Interest Rates and Inflation
Central banks, especially the Fed, raise rates to curb inflation. When rates go up, borrowing costs more, slowing down consumer spending and business investment. This can impact everything from stock prices to corporate debt. Higher rates can put a damper on sectors that rely on debt (think real estate, tech startups) and might slow down deal-making. Mergers and acquisitions, for instance, become more expensive to finance, and that affects the bread-and-butter activities of investment banks. Knowing this in detail shows interviewers you understand how the current economic climate could affect their bottom line.

Investment Strategy Impact
A high-interest-rate environment is a litmus test for investment strategies. When rates are high, bonds with lower yields lose value, and high-growth stocks can take a hit as financing becomes pricier. Asset managers have to think harder about where to invest to secure returns. Banks, meanwhile, might earn more on loans, but they’ll also face clients who are more risk-averse.

If you want to make an impression, mention how certain sectors (think financials or commodities) can benefit from high rates while others may struggle. This shows you’re thinking like an investor, not just a student.

Global Rate Dynamics
Interest rates are interconnected globally. For instance, as the Fed raises rates and the dollar strengthens, investors may shift capital to the U.S., which can impact trade balances and global investment flows. A strong dollar might be a boon for U.S. consumers but puts pressure on companies with international operations due to higher costs for foreign buyers. Highlight this in an interview to show you’re not just looking at the U.S. in isolation, but considering the broader picture.

Bringing it Together

Heading into your finance interview, bring up the U.S. elections and interest rate environment with context, not just headlines. Show the interviewer that you’re tracking how these big-picture issues influence markets, sectors, and investment strategies.

This isn’t just about sounding smart—it’s about demonstrating that you think like a finance professional. You’ll be that one candidate who can connect the dots between global events and bank decisions, and that’s exactly what they’re looking for. Good luck, and go crush it!

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