Michael Strobaek, Lombard Odier;
Credit: Lombard Odier
On Wednesday 6 November 2024, Lombard Odier Group hosted an international seminar to discuss the macroeconomic impact and investment implications of the US election outcome on US and global economies.
The webinar was introduced by Andreas Kessler, Head of Group Communications and the speakers were Michael Strobaek, Global Chief Investment Officer and Samy Chaar, Chief Economist, CIO Switzerland, all of the Lombard Odier Group.
The event addressed a number of different topics relating to the US economy and investment implications, the most significant being the following.
A Republican win will lead to “America First” policies of increased tariffs, lower tax rates, decreased regulation and tighter immigration controls. This in turn will likely result in a moderate inflation increase, but longer-term predictions are more difficult to make. Tariffs will be used to increase purchase of American goods and services, and decisions in this area could have implications for many countries, especially China.
These new policies are predicted to cause a moderate rise in inflation which should also deliver a small increase in growth. As a result, the US Federal Reserve is likely to limit interest rate cuts, especially in the longer term.
The Trump administration has promised to lower taxes and loosen the corporate regulatory environment, with a subsequent boost for US financial assets, especially equities and the US dollar. Treasury yields, particularly longer maturities, should rise as should global stocks. Outlook for gold remains positive.
For the remainder of 2024, financial markets are predicted to remain strong. Economic expansion will continue in 2025, with inflation remaining under control.
US economic policy under the Republican leadership will likely have a negative effect on European markets and economies. European countries would benefit from working together with a united voice, especially as future decisions of the US administration are difficult to predict.
