According to Jinshi Data, IG market strategists said that Trump's election as US President directly led to lower expectations for Federal Reserve rate cuts before 2025. The potential "red wave" means less resistance to his tax cuts and spending plans, coupled with his stance on raising tariffs.
Strategists said this could complicate the Federal Reserve's efforts to fight inflation, with the central bank expected to be more cautious in future easing, with upward pressure on yields and a stronger dollar likely to limit gold prices.
Traders see a 68% chance the Fed will cut rates by a quarter point in December, compared with about 83% before Trump’s victory.
