Filtered by Topic: Trump's second term Use setting Trump's second term
Overview – Tight policy, deteriorating terms of trade and, in Mexico’s case, US trade protectionism will keep GDP growth in Latin America weak and below consensus expectations in the coming years. Fiscal risks will remain in the spotlight as governments …
12th December 2024
While energy market fundamentals point to oil prices falling a bit further and prices of European natural gas and Asian LNG remaining higher than before the Russia-Ukraine war, the uncertain geopolitical backdrop is a major wildcard for energy markets. Of …
3rd December 2024
Although the Republicans completed a clean sweep in the recent election, we are sceptical that this opens the door to additional fiscal stimulus. We do expect the original Trump tax cuts, which are due to expire at the end of next year, to be extended. …
President-elect Trump’s latest tariff threat, this time against the “BRICS” economies, is another early taste of his combative approach to trade policy and its potential impact on financial markets. The chance of a BRICS currency (or another alternative) …
2nd December 2024
It’s the season for the usual avalanche of reports looking ahead to the coming twelve months. Over the coming days and weeks we will publish our macro and market Outlook reports, which will provide in-depth analysis and comprehensive forecasts across our …
It was déjà vu all over again this week after a social media post from Donald Trump rattled markets. Group Chief Economist Neil Shearing is on the latest episode of The Weekly Briefing from Capital Economics to discuss how seriously we should treat the …
29th November 2024
We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. What are Trump’s motives for threatening tariffs and will he follow through? Trump has spoken about using …
Trump tosses first social media hand grenade Here we go again. This week President-elect Donald Trump lobbed his first social media hand grenade since the election – threatening to impose a 25% tariff on Canada and Mexico if both countries didn’t do more …
27th November 2024
What will a second Trump presidency mean for the green transition? Should investors and companies expect an across-the-board rollback on regulation? What does the presence of Elon Musk in the president-elect’s orbit mean for climate policy? Our Climate …
We are sceptical that US tariffs on oil imports will ever see the light of day. But if they did, they would probably result in lower oil production in Canada and Mexico, increased US gasoline prices, and could lead to a tightening in the global oil market …
Headline GDP growth in the Gulf economies will strengthen in 2025 as oil output cuts are unwound. But lower oil prices are prompting a turn to fiscal consolidation, notably in Saudi Arabia, which will cause growth in non-oil sectors to slow. Outside of …
This special episode of The Weekly Briefing from Capital Economics is an exclusive extract from our online Drop-In briefing following Donald Trump’s threat to impose massive tariffs on Mexico, Canada and China. Was this a negotiating ploy from the …
President-elect Donald Trump’s first threatened tariffs since the election are designed to extract concessions on drug trafficking and illegal border crossings, which means it may be possible for the countries targeted – Canada, Mexico and China – to head …
26th November 2024
Given the considerable uncertainty surrounding what policies president-elect Donald Trump will enact during his second term, there is a temptation to read a lot into his Cabinet nominations, but we would caution against that. Following his comprehensive …
25th November 2024
We discussed the global impact of higher tariffs in a Drop-In on Tuesday, 26th November. Click here to watch the 20-minute online briefing. In this Focus, we construct a framework to explore the channels through which an import tariff works, which we use …
Donald Trump’s latest threat to impose massive tariffs on China, Mexico and Canada are a reminder that this is a very real threat to the global economic outlook. In this special briefing, our senior economist team answered questions from the audience as …
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 …
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
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 …
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 …
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. …
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 …
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 – …
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
