Donald Trump has been re-elected as the President of the United States, causing major shifts in financial markets and international relations. US stocks, bond yields, and the dollar have risen sharply in response to his victory. Investors are betting that Trump’s plan to cut taxes and raise tariffs will push up inflation and reduce the pace of interest rate cuts.
This could lead to better returns on savings and investments held in dollars. Bitcoin also achieved an all-time high, following Trump’s election promise to prioritize the volatile cryptocurrency. The value of Bitcoin surged by more than $6,600 to an all-time high of $75,999.04.
Trump’s stance on cryptocurrency stands in stark contrast to the Biden administration, which has led a sweeping crackdown on crypto firms. During his campaign, Trump pledged to make the US “the Bitcoin superpower of the world.”
He also suggested he could fire Gary Gensler, the chair of the US Securities and Exchange Commission, who has taken legal action against several crypto firms.
Trump victory spurs market upheaval
Trump plans to put billionaire Elon Musk in charge of an audit of governmental waste. Tesla’s shares rallied more than 14% on Wednesday to reach a two-year high, reflecting Musk’s support for Trump throughout his electoral campaign. Some economists have warned that Trump’s proposals around trade could come as a “shock” to countries around the world, including the eurozone and the UK.
President-elect Trump has said he would dramatically increase trade tariffs, especially on China. Economists at the National Institute of Economic and Social Research estimate that economic growth in the UK could slow to 0.4% in 2025, down from a forecast of 1.2%. Experts say Trump’s more isolationist stance on foreign policy has also raised questions about his willingness to defend Taiwan against potential aggression from China, a crucial producer of computer chips essential to the global economy.
In his victory speech, Trump reiterated his commitment to “heal the country,” addressing supporters at his campaign watch party in West Palm Beach, Florida, amidst loud cheers from his family and followers. The election marked a decisive victory for Trump, defying expectations and causing significant shifts in both financial markets and international relations.
