Super Tuesday, a pivotal day in the 2024 presidential election, will see voters from 16 states and one territory cast their ballots, potentially solidifying the candidacies of current President Joe Biden and former President Donald Trump. PIMCO Head of Public Policy Libby Cantrill joins Yahoo Finance Live to discuss Super Tuesday's implications for the upcoming electoral contest.

Tuesday will likely serve as the "coronation" of both Biden and Trump as the "eventual nominees" of their respective parties, Cantrill says. However, Cantrill highlights the importance of House ballots, stating that Congress's makeup "should matter to the markets" and will shape the extent of the next president's ability to enact policies.

Turning to economic indicators, Cantrill acknowledges that metrics such as inflation and unemployment appear robust "on paper." However, she notes that when comparing price levels from Biden's inauguration to the present day, "things have all increased a lot," sometimes by as much as 30%. She suggests the rise in living costs explains why Biden is receiving "low marks" on his "handling of the economy," despite the resilience of certain economic indicators.

As the State of the Union address approaches, Cantrill sees an opportunity for the President to directly address Americans and "tell his narrative," highlighting his administration's accomplishments and effectively "kick[ing] off his campaign" ahead of the presidential election.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

JOSH LIPTON: We're now on a big week in politics. Today is Super Tuesday. And President Biden has given his State of the Union Address on Thursday. Our next guest is expecting a range of topics to be front and center. Here to help us sift through all of this is PIMCO's Head of US Public Policy Libby Cantrill.

Libby, it is great to see you. And maybe we'll get right to Super Tuesday, Libby. You know, listen, I mean, obviously, neither Biden or Trump have really been sweating their rivals here. But I'm interested to get your take, what are you looking for. Are there interesting sort of trends and themes you'll be on the lookout for, Libby?

LIBBY CANTRILL: Yeah. Well, good afternoon. I think-- I think for one, on the presidential side, this is going to effectively confirm what we already know, which is this is a coronation of both Biden and of Trump. About 30% of delegates are at stake today for on the Democratic side, and 36% are at stake for on the Republican side. And both eventual nominees will likely do very well today.

So again, just really an affirmation of what we've really known for a while and what we've been telling our clients is that this effectively is not a competition. It is a coronation of these two respective effectively incumbent folks. And that will obviously just position us for a Trump versus Biden election come November.

I do think, though, that there are some interesting races that are a little bit maybe more nuanced but also actually should matter to the markets. These are for down ballot races, particularly in the House. The House is likely going to be competitive for Democrats going into November. And of course, the composition of Congress, we would argue, is almost just as important as who's in the White House, particularly as it relates to fiscal policy, spending, and tax cuts, and what have you. So things that the markets care about.

So there's some-- I'm here in California at our headquarters. There's some races down ballot primaries here in California that could, again, be key to November. But for the things that people are actually really paying attention to, which is the presidential primary, again, effectively just a coronation tonight.

JULIE HYMAN: I do want to talk more about Congress in a minute, Libby. But first, you know, it might be a coronation, but then the real competition begins, right, between the two presidential contenders. And the polling data recently has really caught our attention here, because especially the way that President Biden is being graded on his handling of the economy. I know, for example our political columnist, Rick Newman, has been sort of shocked by the numbers, because he, by his estimation, Biden's done pretty well. What do you think accounts for that disconnect?

LIBBY CANTRILL: Yeah. And I think we would agree with Rick. When you look at all of these sort of economic metrics on paper, things look very good. You know, obviously, economic growth has been incredibly resilient. Labor force participation has been very high. Unemployment has been very low. Inflation has been softening.

You know, but-- and an important but here is that if you look at the price level from when President Biden was inaugurated of January 2021 to now, things like eggs, things like groceries, you know, a gallon of milk, these are all-- these have all increased a lot, in some cases, by about 30% since he was inaugurated. And we really do think this in some ways explains why he is getting such low marks on the economy.

Inflation, as we all know, effectively functions as a regressive tax. And folks have felt that these are sort of become kitchen table issues. And again, they're scoring the president and giving him low marks on this. I do think that maybe some optimistic news for the president, though, is that some of those polls around his handling of the economy are improving ever so slightly.

And so if that trend does continue as we get into the election, that could obviously be better for him. But I think it's hard to disagree that his polls as of now are not where they want-- where the Biden campaign wants them to be. We would just caveat, though, it is still very early.

You know, we're engaged, some folks in the markets are engaged in this. But a lot of people are not paying attention to the 2024 election quite yet.

JOSH LIPTON: Libby, well, here's something that President Biden hopes will pay attention to was his State of the Union Address. That's this week as well. Libby, what do you think his priorities are going to be there? What do you think the president is going to emphasize? And does it actually matter, Libby? I mean, do a lot of Americans still pay attention and tune in for the State of the Union?

LIBBY CANTRILL: You know, I mean, just by the numbers, not really. It was sort of in the 20 millions marks last year. That compares to 120 million people viewing the Super Bowl, one of our traders joked, that we should get Taylor Swift to pop up at the State of the Union, because that would drive viewership.

But I do think that, you know, sort of, kidding aside, this is an opportunity for the president to have the singular focus of 20 million plus Americans who are likely pretty engaged if they're staying home on a Thursday night to watch the State of the Union and to really tell his narrative, to talk about the accomplishments of his administration, the things that they are proud of.

You saw that they just finalized this credit card fee, the limiting of the credit card fees today. I'm sure he'll talk about that. I'm sure he'll talk about the junk fees that they've been trying to work on. So this, again, is sort of his opportunity to give a pitch to the American people and effectively to kick off his campaign. But again, it will depend on what the viewership is. And you know, Taylor Swift probably is not going to be showing up to the State of the Union.

JULIE HYMAN: Libby, actually, believe it or not, we talked about that at our meeting this morning, Libby. So-- so when in conversations with clients right now, given all the noise out there, given that it's still early, what are you telling clients is the single most important thing to watch, whether it's an issue, whether it's a candidate or a particular race?

LIBBY CANTRILL: You know, I would just say that our clients are already jumping to what a victory for what a Trump 2.0 would look like, what a Biden 2.0 would look like. Again, we would say, it's kind of early at this point. Just to the point that I made earlier, we do just emphasize that the composition of Congress really will matter. The Senate-- the Democrats control the Senate right now by one vote, looks very difficult for them to keep the Senate just given the bad map that they have.

The House, however, that the Democrats are hoping they can flip that from Republican control to Democratic control. So some of these dynamics that are on the Congressional level. While, again, people aren't really paying attention to, actually will it really will matter in terms of what the next president can or cannot do.

But in terms of things to look out for, some of these economic indicators as inflation continue to come down. Does the price of food and rent particularly, does that start softening? Because we do think that could be sort of a tailwind what happens to gas prices.

And then importantly, is there a credible third party that emerges? Because we do think this could actually be more of a threat to President Biden than to President Trump, particularly if a party calls No Labels. They are thinking about making a run. They could be on the ballots in many states. And that, again, could pose a threat to President Biden.

But overall, it is still very early, even though it doesn't feel very early, because we now know-- it already feels like we're months into this general election, even though we really are not. So we would just caution people from extrapolating too much from like a single pole or from a single indicator at this point.