Investment trust insider on Trump and financials – James Carthew: The winners of Trump’s regulation bonfire
Trusts that will leap on Donald Trump’s looser financial regulations and an environment of higher-for-longer interest rates.
It will take some time for the dust to settle following the US election. The US equity market responded positively, but US government bond yields rose.
A few of Trump’s policies, if implemented, are likely to be inflationary, in stark contrast to his promises to voters to tackle the cost of living. Chief among these are the tariffs he wants to impose on all imported goods. European goods would attract a 20% tariff, for example, but for China the figure proposed is 60%. That spells bad news for exporters and could weigh on global economic growth.
Concerns about US inflation seem likely to keep interest rates higher for longer, which was one of the reasons the US dollar rose in the wake of the Republican victory. That could bring Trump into conflict with the US Federal Reserve and its current chair Jay Powell. Any perceived watering down of the Fed’s independence would add to bond investors’ concerns.
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