August 2017 Commentary

Markets have experienced three phases since the election of Donald Trump. First, there was the hope and the hype of the reflation trade which served to overwhelm any doubts about economics or non­‑US geopolitical issues. However, the accompanying vertical rise in the price of assets that benefit from stimulative fiscal policy in the US was stopped suddenly in its tracks in early March. By then markets realized that the implementation of Trump policy wasn’t going to be a slam dunk. In addition, US growth was faltering. Yields fell back to test cycle lows while equities rotated in favour of disinflation; phase two was in place...

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Emma Querengesser