Post US Election Reaction

As with Brexit, not may people foresaw Donald Trump emerging as winner of the US presidential election. There is obviously a considerable amount of discontent and frustration across Western democracies.

This election result is a vote against the political establishment from a large part of society that is angry that government policy has done little to help it since the global financial crisis some 7 years ago.

Whilst changes are now likely to be forthcoming, it is difficult to have immediate clarity on what these will be.

Deja vu all over again. When considering the financial markets, we have seen this all before, courtesy of the aftermath of the EU referendum in June. Initially, markets have been somewhat muted and perhaps investors have learnt that there is no need to panic.

However, globalisation will come under the spotlight under a Trump administration and we could expect a greater focus on domestic political priorities at the expense of free trade and globalisation.

Having said that, many people will be concerned about what we’ve heard Trump say over the last 18 months of campaigning. As always seems to be case, the constraints of office should mean that what he can do as president is likely to be much more moderate. Lots of things that are said on the campaign trail cannot be delivered.

Direction of Interest Rates
In terms of monetary policy, the result makes a December interest rate rise in the US less likely. The Fed is likely to have more than half an eye on its role as global financial market policeman and the uncertainty that this election result creates for the global economy and, for emerging markets, could weigh on its policy decision in December.

Overall, it would seem reasonable to expect the momentum in the US economy to continue. This should result in modest growth in 2017, relatively low inflation and interest rate increases. Consequently, it is unlikely that there would be a US recession.

…the constraints of office should mean that

what he can do as president is likely to be much more moderate.

Lots of things that are said on the campaign trail cannot be delivered.

How should investors respond?
Brexit and the US presidential result should remind investors that there is plenty of scope for political surprises. There are several significant elections looming in Europe over the next 18 months, which could be profoundly important for the future of the Eurozone project. It would be wrong to assume that America has a monopoly on disgruntled voters and we will keep a very close eye on political developments.

If you wish to take a step in the right direction with planning your finances, please feel to call us on 01626 833225 or email us at to find out more or to arrange an initial complimentary meeting.

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Please note that the above article does not constitute financial advice.

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