December 2024 | A resilient US economy, the anticipation and eventual victory of Donald Trump and his recent appointments, along with risks around inflation have been driving nominal and real yields over the past months. But US equities and the dollar rose amid a belief that the US economy would benefit from Trump's policies at the expense of the rest of the world. While we agree US policies would reverberate across European assets and emerging markets, the actual impact depends on specific measures and countermeasures.
01 | The fiscal impact of US policies, such as tax cuts and deregulation, on consumption are not yet clear. Current indications are that they would be positive for growth in the near term and then weigh on growth in 2026. Concerns about the high fiscal deficit and debt could put additional pressure on bond yields.
02 | The Fed is walking a tightrope in its attempt to weed out the last leg of inflation. Policies around immigration control and import tariffs could create upward risks on inflation, and the Fed may become more data-dependent and ease less than currently expected.
03 | Balancing EU fiscal governance rules with the need to invest more to improve productivity, enhance competitiveness and improve defense will be difficult, causing fiscal policies in countries such as Germany, France and Italy to become more important.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of December 5, 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the [author] and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.
