untitled design

Inflation could soar again under a new Trump administration – Nomura

The US presidential election in November 2024 looks set to be a contest between the same people as the previous ones in 2020, with President Joe Biden as the Democratic Party candidate and former President Donald Trump as the Republican Party candidate. Under a Trump presidency, Nomura economists would expect a rebound in inflation, the abandonment of measures toward carbon neutrality and an increase in geopolitical risk.

Main consequences for the markets of a political turn in the event of a second Trump presidency

Should President Biden be re-elected, there is a risk of frequent clashes over the debt ceiling or a government shutdown, but our primary scenario for overall policy is a continuation of the status quo. However, If Trump were to return to the White House, we believe the market implications of the policy changes would be significant..

We believe that one of the main consequences of a second Trump presidency would be renewed upward pressure on inflation. In addition to Mr. Trump's eagerness to reduce the corporate tax rate and other taxes, we would also expect (1) the appointment of a moderate chairman of the Board of Governors of the Federal Reserve System (2026), (2) trade policies protectionist (higher import costs) and (3) measures to curb the influx of immigrants (supporting higher wages). We would also expect a decline in support for decarbonization and renewable energy that the Biden administration has promoted.. Additionally, diplomatically, we believe global geopolitical risks could increase if a Trump administration pursued isolationism.

Source: Fx Street

You may also like

Dior, anatomy of freedom

Dior, anatomy of freedom

This article is published in issue 18 of Vanity Fair on newsstands until April 30, 2024. Join your hands proudly.

Get the latest

Stay Informed: Get the Latest Updates and Insights


Most popular