The presidential elections in the United States are getting closer, and the financial market is already assessing the possible repercussions that could arise in case of a victory for Donald Trump. Some currency traders believe that the current ex-president's policy would be positive for the dollar, especially if he manages to encourage the return of major companies to the United States.
However, Andrew Authers, an investment specialist, points out that a possible return of Trump to the presidency would not have such a positive impact on the bond market. This is because a unified government under the Republican party could lead to a mismanagement of the deficit that would affect the stability of these instruments.
On the other hand, fixed-income investors could benefit from a rise in inflation in the first years of a new Trump term. Specifically, it is expected that tariffs imposed on imports could increase their cost by 17%, which hasn't been seen since the Great Depression. Although Trump seeks to attract companies to his country to keep prices in check, the construction of new factories would take longer than the immediate price increase.
Despite the criticisms and possible negative consequences, the backing of Wall Street investor groups seems to be favoring Donald Trump in the electoral race. As the election date approaches, polls show a tie between Trump and Vice President Kamala Harris, keeping financial markets on edge.
Analysis also shows that Trump's political strategy could be viewed positively for stocks, but negatively for bonds. There are concerns about the possible complications for exports and the attempt to undermine the independence of the Federal Reserve to control interest rates during inflationary times.
In summary, Donald Trump's return to the White House could impact various sectors and financial markets differently, generating expectations and concerns in a still uncertain scenario just days away from the elections.
