President Trump: The populist or pragmatist?

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Registered: ‎21-09-2015

President Trump: The populist or pragmatist?

[ Edited ]

Donald Trump’s election as President of the United States (US) on 8 November 2016 sparked a brief but substantial sell-off in risk assets, however these losses were predominantly recovered within two trading days. In the period that has followed, we have seen developed equity markets strengthen, with notable sector rotation within equities. The US dollar has also strengthened while US bonds have weakened with yields rising significantly in the long end of the curve.

 

While there are still many areas of uncertainty at this point, and surprises during the coming months are likely, we are seeing some regions, sectors and currencies benefiting more than others.

 

Will President Trump emerge as a pragmatist or a populist in driving policy in the US?

 

President Trump the populist

Policies are likely to be nationalistic, appeal to the right, favour protectionism and pose a high risk of trade wars.

 

President Trump the pragmatist

Policies are likely to be more aligned to traditional Republican party views, rhetoric is probably more subdued than during the campaign period.

 

Irrespective of whether populism or pragmatism prevails in the White House, we are likely to see business tax cuts and personal income tax cuts, large scale infrastructure spending and defence spending. These policies are supportive of continued economic growth in the US and have the potential to be inflationary.

 

Populist or pragmatist - what's your view?

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