ARK Invest CEO Cathie Wood drew parallels between former President Donald Trump‘s economic policies and early American financial strategies during a recent episode of “In the Know,” while analyzing potential market reactions to the upcoming election.

What Happened: Wood, popularly known for leading ARK Innovation ETF ARKK, noted a correlation between S&P 500 performance and Trump’s polling numbers, highlighting several key economic policies that could impact markets. She particularly focused on Trump’s stance on taxes, tariffs, and monetary policy.

“The market likes tax cuts and has been worried that the tax cuts in the original tax bill that was passed under President [Trump] are going to expire at the end of ’25,” Wood explained. She added that Trump has indicated support for extending these cuts and introducing additional personal and corporate tax reductions.

Regarding tariffs, Wood offered a historical perspective: “In the very early days of our country… we didn’t have the personal income tax, all we had [were] tariffs and these started under President Washington.” While expressing personal opposition to tariffs, she suggested markets are beginning to view Trump’s tariff rhetoric as a negotiating tactic.

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Why It Matters: Wood also addressed Trump’s stance on monetary policy, noting his advocacy for lower interest rates. She suggested that growth-oriented policies, including regulatory cuts, could affect rate trajectories differently than expected. “If we do put in place growth policies, then the odds are short rates actually won’t come down as much as we think,” she said.

Wood suggested that reducing regulations could benefit innovation, referencing Trump’s previous “two-for-one” regulatory policy that required eliminating two existing regulations for each new one introduced.

The upcoming presidential election is shaping up to be a tight race between Trump and Vice President Kamala Harris, with recent polls indicating a neck-and-neck competition.

Moreover, the fiscal policies of both Trump and Harris could significantly impact the U.S. national debt. According to a recent analysis, their proposed tax and spending measures could add trillions to the debt by 2035.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.