“The ‘Trump sweep’ should lead to higher growth, higher inflation, and higher rates, supporting the USD in the short term. Trump’s re-election may limit future rate cuts due to the expected looser fiscal policy, including extended tax cuts. The Republican’s looser fiscal policy could boost US growth above potential and put upward pressure on inflation. Donald Trump won the US election and his Republican Party are one step away from a full sweep, with a formal confirmation on the House of Representatives election still pending. This ‘Trump sweep’ should lead to higher growth, higher inflation, and higher rates, supporting the USD in the short term, while concerns over US debt could become a longer-term headwind.”
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Morten W. Langer
