Donald Trump’s return to the White House as the 47th president is set to bring seismic shifts to financial markets as his agenda unfolds with dramatic consequences for growth, inflation, and investor strategy.
Investors worldwide are being urged to prepare for heightened market volatility and a new era for the world’s largest economy.
Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organisations, says: “With at least 100 executive orders reportedly ready for signing on his first day in office, the newly re-elected president will launch initiatives targeting trade tariffs, deregulation, and defence spending, which are likely to jolt markets and shape investor expectations over the coming months.
1. Protectionist tariffs
President Trump’s commitment to reshaping global trade is expected to kick off with tariffs on China, Canada, and Mexico.
“Reports suggest incremental hikes of up to 25% on trade with these nations will commence immediately. Trump’s tariff plans, including broader duties of up to 20% on all imports, could significantly disrupt supply chains while stoking inflationary pressures,” comments Nigel Green.
“Investors in multinational corporations and export-heavy sectors should remain vigilant for shifts.”
He continues: “The inflationary impact of these tariffs could push consumer prices higher, potentially forcing the Federal Reserve to reconsider its current rate path and implement additional interest rate hikes.”
Combined with Trump’s ambitious spending plans—which are expected to further drive inflation—this could lead to tighter monetary policy in the months ahead.
“Currency markets are already anticipating these dynamics, with the dollar likely to strengthen in the short term before facing depreciation as inflationary concerns deepen.”
2. Deregulation policies
The deVere CEO notes: “Deregulation is set to reignite the financial, energy and crypto sectors, with expectations that Trump will roll back many of the restrictions imposed during the Biden administration.
“Banking stocks, which rallied post-election, could see further gains as Wall Street prepares for a more business-friendly environment.
“Financial services firms, fossil fuel producers and digital assets like Bitcoin stand to benefit, with potential ripple effects across equities and credit markets.”
3. Defense spending surge
“Under Trump, defence budgets are anticipated to surge, giving rise to new opportunities in aerospace, cybersecurity, and logistics sectors. This increased spending may strengthen defence stocks while potentially crowding out private investment in other sectors,” affirms Nigel Green.
4. Gold poised for gains
Trump’s sweeping policies are “likely to ignite inflation, further bolstering the appeal of safe-haven assets such as gold. China’s pivot toward gold and away from the dollar is set to exacerbate these trends, potentially leading to record highs in bullion prices.”
What this means for investors
The next six months will be marked by uncertainty, with the interplay of protectionist policies, deregulation, and inflationary pressures dictating market moves.
Strategic diversification and a focus on inflation-resistant assets could be key to safeguarding portfolios and seizing opportunities in the new economic reality.
“With Trump’s economic vision underway, investors must prepare for a fast-changing landscape in the world’s largest economy. Seeking tailored advice now is critical to capitalising on the turbulence and emerging opportunities,” concludes the deVere CEO.
