- His suggested tariffs will push up the price of goods
- The last Trump presidency saw stocks rally, but this one could be inflationary
Markets seem relatively untroubled by the prospect of another Donald Trump presidency. So far, there has been no tell-tale sell-off in renewables, nor a pile-in to autos or oil. The consensus seems to be that Trump is good for stocks: last time, his tax cuts triggered a wave of earnings upgrades and a stock market rally. But if investors are banking on the same thing happening again, they could be in for a nasty surprise.
Analysts at UBS highlight just how different the economic backdrop to the last election was – shown in the table below. Crucially, debt today is so high that there isn’t much room for big government spending, and analysts warn that “fiscal room" and "bond market’s patience" are both exhausted.