Commentary: If Trump wins, expect interest rates to rise

Published On Oct 29, 2024, 9:55 AM

The article discusses the potential impact of a second Donald Trump presidency on interest rates, predicting that they will likely rise if he wins. This expectation is partly due to Trump's plans to implement significant tariffs and reduce the workforce through deportations, which could increase inflation and thus, induce higher long-term interest rates. The 10-year Treasury bond rate has already risen since mid-September, indicating that the market anticipates these changes, with current predictions suggesting the 10-year Treasury yield could reach as high as 5% if Trump wins.

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If Trump wins and implements his proposed tariffs, this would likely lead to higher inflation, causing interest rates to rise. Investors are already reacting to the possibility of higher rates, pushing bond yields up. This trend suggests that sectors sensitive to interest rates, such as real estate and consumer finance, may face pressure.

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