‘Trump Trade’ of Large Tariffs and Deficits Looms as Market Braces for 2024 Election

Published On Oct 25, 2024, 5:05 AM

Investors are increasingly focusing on former President Donald Trump’s economic policies as his odds of winning the upcoming election rise. His proposals, which include significant tax cuts and steep tariffs, are projected to add $7.5 trillion to the U.S. government debt over a decade. This has caused Treasury yields to rise, reflecting concerns about increased government borrowing and potential inflation. Analysts suggest that if Trump wins, investors might want to short bonds and increase their positions in stocks, anticipating an uptick in corporate earnings despite the risk of higher inflation and interest rates.