November 2024 | Former President Donald Trump will return to the US White House for the next four years and, with the Republican party also taking the Senate and possibly the House, a “red sweep” is the most likely outcome. Financial markets reacted by extending popular “Trump trades” – pushing up bond yields, the US dollar and equity futures – as investors assign higher odds of Trump turning policy proposals into reality. The inflation impact of Trump’s policies will pose risks to fixed income investments, and these could be amplified by concerns about US fiscal sustainability.
01 | We think the new president may prioritize tariff and immigration policies over tax cuts, as these can be implemented through executive orders without congressional approval.
02 | Full implementation of Trump’s far-reaching tariff proposal will likely leave no winners in a world of heightened trade uncertainty and protectionism.
03 | We believe higher inflation and a more hawkish Fed will pose risks to fixed income investments, while supporting the dollar in the short term. Tighter financial conditions may be transmitted across the globe, with Asian markets particularly vulnerable given the added shock from higher tariffs.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of November 6, 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the authors 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.
