Markets Brace for Potential Trump Return to White House

Traders anticipate less volatility than 2016, with focus on tariffs, tax cuts, and possible Republican control of Congress.

Donald Trump's potential return to the White House is already being factored into market strategies, with traders expecting less volatility than his surprise 2016 victory.
Trump's proposed policies, such as imposing 10% tariffs on imports and making his 2017 individual tax cuts permanent, could put upward pressure on bond yields, bolster the dollar, and exert a drag on trading partners' currencies.
The fiscal impact of the election is expected to be more muted this time, as a key issue will be whether to extend Trump's 2017 tax cuts when they expire next year.
Goldman Sachs predicts that Republicans could win control of both the White House and Congress, which could result in higher bond yields by keeping the Federal Reserve on guard for a potential overheating in the economy.
Trump's impact on trade and geopolitics could be positive for the dollar, as it's negative for important currencies like the euro, yuan and Mexican peso.