Investors Brace for Volatility After Trump's Reelection

Donald Trump's re-election, referred to as 'Trump 2.0', is expected to create significant volatility in global financial markets, driven by proposed policies that include high public spending and tax cuts, which could increase U.S. deficits by up to $7.5 trillion. A report suggests that these policies might boost bond yields and create turbulence in both equity and bond markets, while potentially undermining the dollar's long-term dominance. Following Trump's election, Asian markets reacted negatively due to rising U.S. bond yields and concerns about his trade policy. There's also a growing bearish sentiment among traders in the Treasury market, anticipating inflationary pressures and sustained high interest rates. Superannuation funds are advised to brace for increased volatility as the implementation of Trump's policies unfolds, impacting long-term investment strategies. Overall, the financial landscape appears increasingly uncertain, with implications for both domestic and international economic stability.