GDP - Could A Second Trump Presidency Disrupt The Stock Market? Capital Economics Analyst Weighs In | Benzinga
As speculation grows over the potential return of Donald Trump as president, investors are contemplating the possible consequences for the stock market.
What Happened: A research note by Capital Economics suggests that a second Trump term could significantly impact inflation, interest rates, and the US dollar. These critical elements, if they surge, could pose a headwind for stock prices., reported Business Insider.
Trump is leading President Joe Biden in several polls and betting markets, making a second term for Trump a possibility.
Capital Economics’ market economist, James Reilly, believes that Trump would most likely escalate the ‘trade war’ with China and potentially impose universal tariffs on US imports, rather than repeating the fiscal expansion and tax breaks that boosted equities during his first term.
“We don’t think there is much scope for Trump to repeat the fiscal expansion and tax breaks which boosted equities during his first term in office; instead, we think the policy most likely to move markets this time would be escalating the ‘trade war’ with China and potentially imposing universal tariffs on U.S. imports,” Capital Economics’ market economist said.
Trump has hinted at implementing a 60% tariff on Chinese goods if re-elected, a substantial increase from the tariffs imposed in 2018. Such a move would likely disrupt global trade and could reverse progress made by ...