Donald Trump’s sweep to victory in the U.S. presidential election has ignited the so-called “Trump trade,” with the dollar, crypto and U.S. stocks all surging, as investors assess the global implications of his return to power.
But the central bank may have been thrown a curveball with Trump’s election, since the Republican’s plans to raise tariffs could fuel price rises. Following the Fed’s 25 bps rate cut on Thursday, Chair Jerome Powell gave little guidance on how fast and far rates will now fall. Some analysts had warned it would be too early for Beijing to formalize a strategy only days after Trump’s election victory, but investors have repeatedly pushed up Chinese stocks only for policymakers to disappoint expectations.
Scholz’s Social Democrats now rule with remaining coalition ally the Greens in a minority government but face pressure to hold a no-confidence vote sooner. A contentious draft budget also needs to be finalized. The summit has been dubbed the “climate finance COP” for its central goal: to agree on how much money should go each year to helping developing countries cope with climate-related costs.