Rama Krishna Sangem
Americans stock markets are worried over the possible impact of Zohran Mamdani’s clear victory as new mayor of New York city, iconic metropolitan area in the country. Mamdani’s claim that he is a Democratic Socialist doesn’t go well with the corporate world of the Wall Street, American stock market. Mamdani’s poll promise to make the city of New York affordable and his vow not to take dictates from the billionaires too is not a thing of joy for the markets.
Wall Street braced for change with the election of Democratic Socialist Zohran Mamdani as mayor of New York City on Tuesday, an outcome set to reverberate in the heart of global capitalism as financiers worry about the city’s competitiveness and business appeal, says a Reuters story just after the results of New York mayoral elections were announced.
Investors watching the results of governors’ races in other states were also analyzing wins by Democratic candidates, saying they could be seen as evidence of renewed strength for the party against President Donald Trump’s Republicans ahead of next year’s midterm elections. In Virginia, Democrat Abigail Spanberger easily won the election for governor, becoming the first woman elected to that role. And in New Jersey, Democrat Mikie Sherrill also won the governor’s race by a large margin.
Mamdani’s win “will be an interesting experiment and we’ll see how much he tries to really change New York City and how he is accepted,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. Looking collectively at the New York City race and the Democratic victories in New Jersey and Virginia, Ghriskey said, “It’s a fairly strong mandate against the administration in Washington.”
Rents freeze on Mamdani agenda
Mamdani focused his campaign on affordability. His agenda includes a rent freeze for rent-stabilized apartments, free bus service, universal childcare and city-run grocery stores. His policies also include hiking taxes on New York City’s wealthiest and raising the corporation tax, driving worries among the finance community that the city’s competitiveness will suffer.
While New York’s mayor has no direct oversight over Wall Street, the position sets the tone on perceptions of whether the city is business-friendly. While many investors and financiers say they can sympathize with the affordability issues Mamdani has raised, they expressed broad misgivings about his tax policies.
“When I look at the economics around the cost of living in New York City and when a one-bedroom apartment in New York City is $5,000 a month, that’s unsustainable,” Phil Blancato, chief market strategist at Osaic in New York, said after the election results. “And whether the rhetoric around what can be done or can’t be done is true or not, that’s the reason for this kind of … victory in New York City. But when you think about the increase in taxes at the small-business level, corporate level … that has a significant impact.” says the Reuters story.