Filtered by Topic: Trump's second term Use setting Trump's second term
News of who’s in – and who’s out – of Donald Trump’s government, and what that means for the US and the rest of the world, continues to swirl. While Trump’s choice of Scott Bessent for Treasury Secretary is reassuringly orthodox, there is still …
25th November 2024
We remain sceptical that deregulation will provide a disinflationary boost to the economy’s supply side and we suspect that any reduction in government spending or headcount would turn out to be modest. Libertarian-minded Republicans have long-believed …
22nd November 2024
The resilience of commodity trade: a history lesson The election victory of Donald Trump and the prospect of renewed trade restrictions has naturally sharpened attention on the potential impact of tariffs on trade flows, including on commodity trade. Our …
Unsurprisingly, a second Trump presidency will support oil and gas production while rolling back environmental regulations. The fate of the Inflation Reduction Act is less certain, given that the support for manufacturing investment aligns with Trump’s …
With the dust settling on Trump’s victory earlier this month, this Update takes stock of what has happened across currencies, bonds, and equities; the reasons for these moves; and what we think will happen next. As was the case after Trump’s win in 2016, …
Given our expectation that the Trump administration will push forward with plans to raise tariffs across the board, we have generally revised down our forecasts for stock markets outside the US. And with China being the main target of the trade war, we …
21st November 2024
Egypt’s policy agenda shifts to long term reforms With Egypt’s macroeconomic stability restored, officials are starting to turn their attention to longer term reforms and number one on the list appears to be reinvigorating the stalled privatisation drive. …
Friendshoring into India has for the most part been limited to high-end manufactured goods, but broader supply chain reconfiguration into the country could take place if the Trump administration imposes a 60% tariff on China. Trump has also been critical …
The experience of the first Trump administration suggests that other countries will retaliate to the imposition of new US tariffs but in a way that is measured and minimises the risk of escalating tensions with Washington. The imposition of …
20th November 2024
We held a series of client meetings in the US last week which focused on the implications of Trump’s victory in the US election and the spillovers to EMs. This Update answers some of the most frequent and important questions that came up. What impact will …
We think that the euro will fall to parity against the US dollar next year but will strengthen against some other currencies, such as the renminbi, and on a trade-weighted basis we forecast it to be little changed. So the effect of FX moves on growth and …
18th November 2024
US President-elect Donald Trump’s plans to curb immigration and undertake a mass deportation of undocumented migrants could boost labour supply in countries that are the source of migrants. But there could be social and fiscal costs, as well as lower …
I was visiting clients in the US last week, where the mood felt very different from Trump’s first election victory in 2016 (and when, incidentally, I was living and working in New York). Then, the overriding mood was one of shock. Today, there is less …
Group Chief Economist Neil Shearing hops off the plane from New York and hops onto the latest episode of The Weekly Briefing from Capital Economics to explain what Donald Trump’s cabinet nominations signal about the macro policy outlook, how Europe and …
15th November 2024
Road to 2% inflation a bumpy one The hotter-than-expected October price data serve as a reminder that the Fed’s fight against inflation is not over. Based on the CPI, PPI and import price data, we estimate that the Fed’s preferred core PCE deflator price …
US President-elect Donald Trump’s cabinet nominations announced over the past week give us a guide to how his policies will affect Latin America. The fact many of his choices, including Kristi Noem (Homeland Security secretary) and Thomas Homan (“border …
Déjà vu for industrial metals While it is uncertain exactly how Trump will approach tariffs during a second term, China will clearly be in the firing line and commodities could be caught in the crossfire. For context, Chart 1 shows the US’s bilateral …
We think that the impact of Trump’s proposed 10% universal tariff on euro-zone GDP would be very small, in part because we expect the effect to be offset by a weaker euro. So we aren’t pushing down our already below-consensus GDP growth forecasts any …
Stronger inflation rules out rate cut before end-24 The third successive rise in Egypt’s headline inflation rate has all but quashed hopes that the central bank will cut interest rates before the end of this year. But, as we have long argued, a sharp …
14th November 2024
President-elect Trump’s distaste for trade deficits surely does not extend to worrying about the US’s large-scale import of carbon emissions through trade flows. The global imbalance between importers and exporters of CO 2 emissions is likely to shrink …
While Trump has vowed to lower mortgage rates to 3%, we expect the net effect of his policies to have the opposite effect, keeping borrowing costs higher for longer. With that in mind, we are changing our home sales forecast to show a shallower and later …
Donald Trump’s re-election has changed perceptions of how the war in Ukraine will develop, with many hoping for a quicker end to the conflict. This Update looks at how the war might evolve and the economic implications for Russia and Ukraine, for Europe …
If Donald Trump follows through on his threat to impose a high sector-specific tariff on European cars, German firms could suffer a big reduction in exports, deepening the crisis in the sector and adding another headwind to economic growth. That would be …
13th November 2024
We doubt the S&P 500 will come a cropper in 2025 even though the index fell in 2018 when Donald Trump began to wage a less ambitious trade war than the one he is planning now. Although the S&P 500 was struggling today at the time of writing, it had been …
12th November 2024
As the dust settles on that momentous election, Group Chief Economist Neil Shearing is on The Weekly Briefing from Capital Economics to discuss what is known and unknown about the coming Trump administration. He talks about potential guardrails on the …
8th November 2024
We expect the policies that will be delivered during Donald Trump’s second term to be a headwind for equities in the US. We still anticipate strong gains next year on the back of growing AI-enthusiasm, but not far beyond as the resulting bubble bursts. …
Trump’s tariff threats – lessons from his first term The reaction in Mexican financial markets to Donald Trump’s victory in the US election has been somewhat surprising. Having come under pressure as it became apparent that Trump was on course to win – …
The market reaction to Donald Trump’s election victory suggests that, with the Republicans closing in on a clean sweep of Congress too, his return to the White House will be a net positive for the economy. We remain highly sceptical that the Republicans …
Winston Churchill is supposed to have said that “jaw-jaw” is better than “war-war” and we think European politicians will take the same view when faced with the threat of a trade conflict next year. We set out our working assumption about how a US …
Trump trade puts rupee under pressure All of our analysis of the US election can be found on this webpage and in the recording of an online briefing held after the result on 6 th November. In terms of the market reaction, the “ Trump trade ” has been in …
With the US election out of the way and markets starting to settle down after some dramatic swings yesterday, attention now turns back to the more humdrum topic of central bank policy and the near-term economic outlook. While the global easing cycle is …
7th November 2024
Mexico is one of the most vulnerable economies to the policies that US President-elect Trump flagged on the campaign trail. This Update looks at the channels through which it could be affected. One key point in all of this is that policymakers don’t have …
We have revised some of our key market forecasts in response to Donald Trump’s victory and the news that the Republicans are on course to regain full control of Congress. These include higher projections for the 10-year Treasury yield and the greenback. …
The victory for Donald Trump in the US election will have major ramifications for the Middle East. (You can read all of our US election coverage here .) For the most part, the Middle East should be shielded from any direct impact if Trump pushes ahead …
OPEC+ and China, not Trump, will drive prices in 2025 Trump’s election victory won’t have a big impact on commodity markets in the short term. US oil and gas production is near record highs and prices, not policy, will be the key driver of drilling next …
COP29 – which is set to kick off in Baku next week – has been dubbed the ‘finance COP’ given that the top priority for negotiators will be to agree on a new climate finance pledge. However, Trump’s election victory looms large over the event and adds to …
Large US tariffs would hurt China’s export sector but less than many suppose. We estimate that the direct impact of even a 60% US tariff on goods from China would be well under 1% of China’s GDP . The bigger challenge for policymakers could be the …
Donald Trump’s second presidency is likely to result in lower US GDP growth, faster US inflation and a slightly higher path for the fed funds rate. The implications for the rest of the world are highly uncertain, not least because it is unclear how many …
6th November 2024
This early edition of the Capital Daily provides our first thoughts on the market reaction to the likelihood of a second Trump term. The US election has seen a stark shift to the Republican Party, with Trump claiming victory in the Presidential race and …
Trump appears to be edging ahead The presidential election remains too close to call, but Donald Trump does appear to be edging ahead in some of the key swing states. At close to 11.30pm ET, the NYT gives Trump a 91% chance of victory, expecting him to …
In a week in which the Federal Reserve and the Bank of England are expected to deliver further rate cuts, and there’s anticipation that the Standing Committee of China’s National People’s Congress will flesh out the details of much-anticipated fiscal …
4th November 2024
Race going down to the wire Although the betting markets are still convinced that Donald Trump will win next week’s presidential election, the polls remain much closer – and within the margin of error. Many of those polls have tweaked their methodologies …
1st November 2024
We think that if Vice President Harris wins the US presidential election next week, she would be more likely to stick to policy continuity, and EM risk premia would remain low. If former president Trump is elected, we would expect an initial adverse …
The US election next week is likely to have major ramifications for geopolitical ties, trade, and financial markets in the MENA region. (All our analysis on the impact of the US election on EMs can be found on our dedicated webpage here .) Attention in …
31st October 2024
EMs are playing a growing role as substitute markets for Chinese exporters that face rising trade barriers in DMs. A second trade war with a re-elected President Trump would only accelerate that shift. It is plausible that a sizeable portion of the loss …
30th October 2024
The outcome of the US election won’t have a sizeable impact on most commodity prices over the next few months. Instead, differences between the candidates’ views on vehicle emissions, LNG exports and foreign policy stance on Iran could affect oil and gas …
29th October 2024
All our analysis on how the US election could affect emerging market economies can be found on our dedicated webpage . A key risk for Mexico from the US election is that a Trump administration could withdraw from the USMCA free-trade agreement. In a …
While the perceived probability of a Trump win has increased over recent weeks, we believe there is still ample scope for a sizeable repricing across markets once the election outcome becomes clear. We think a Republican “sweep” would probably lead to …
28th October 2024
