Donald Trump’s inauguration on Monday could signal a more tumultuous phase for markets, with the Republican likely to act rapidly on a wide range of issues, including trade and immigration, which are expected to move asset values.
Trump’s tariff measures may exacerbate inflation fears, which are already weighing on bond and stock prices, while efforts to tighten immigration rules may also have an impact on those markets. Moves to relax regulation are expected to boost asset prices, particularly cryptocurrency and bank stocks.
“The markets will be extremely sensitive to this speech,” said Jeff Muhlenkamp, portfolio manager at Muhlenkamp & Co. “Everyone right now is attempting to parse every phrase and nuance that comes from Trump or his key backers.
Some prices already reflect Trump’s anticipated policy goals, including tax cuts, decreased regulations, and tariffs on foreign goods. The speech may also establish the framework for White House initiatives in the coming days and weeks. Financial markets are prepared to respond on any indication that the next government will take a different path than it has previously indicated,” said Doug Peta, chief U.S. analyst at BCA Research.
Stocks have historically had a muted reaction to presidential inaugurations, but this time may be different due to Trump’s unpredictable nature and capacity to jolt markets with his comments, according to investors.
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