Equity markets have risen strongly since Donald Trump’s decisive victory in the US presidential election. The sustainability of this US-centric rally, however, will likely hinge on the trajectory of bond yields.
In our latest Six Minute Strategy video, Guy Monson, Chief Market Strategist, is joined by Dr Subitha Subramaniam, the Chair of our investment policy committee. She argues that this administration could see more effective policy implementation in its second term. Trump now commands greater support within the Republican party, better understands the levers of power, and will select a transition team more aligned with his policy goals.
The challenge though is his agenda, which includes tax cuts, raising tariffs, and tightening immigration. All point to either an increase in government spending or upward pressure on inflation - potentially a difficult combination for bond markets.