“Trump effect” on the markets: the reconquest of the White House by the tycoon gives wings to the dollar, which rose to its highest level in two years and to US bond yields, but also to bitcoin while in Europe the indices welcome the tycoon’s victory of the economy. Traders are increasing bets on new tax cuts, tariffs and rising inflation. The news that the former president’s party has won control of the Senate has strengthened the prospect of large tax cuts, higher tariffs and deregulation, seen as a boost for the greenback. And in fact the euro slipped to 1.0703 against the US currency, losing 1.79% while the dollar gained 1.48% against the yen at 153.86. Bitcoin meanwhile rose by more than $6,000, reaching a record high of $75,371.69, surpassing the previous peak of $73,797.98 reached in March.
Trump has pledged to make the United States the “bitcoin and cryptocurrency capital of the world” and to put tech billionaire Elon Musk in charge of a broad overhaul of government waste. The yield on the 10-year Treasury reached 4.46%, the highest since the beginning of July, while that of the 30-year long bond reached 4.63%, an increase of 0.15 percentage points and the largest change daily for over a year
#dollar #bitcoin #highs #Tempo
**Interview with Financial Analyst Sarah Thompson on the “Trump Effect” in Markets**
**Interviewer:** Thank you for joining us today, Sarah. We’ve seen quite a significant market reaction following Donald Trump’s reconquest of the White House. Could you explain what you refer to as the “Trump effect”?
**Sarah Thompson:** Absolutely, happy to be here! The “Trump effect” essentially refers to the impact that Donald Trump’s return to power has had on financial markets. We’ve seen the dollar soar to levels not seen in two years, and that’s heavily influencing global market dynamics. Investors are optimistic about the potential for tax cuts and deregulation, which traditionally stimulate economic growth.
**Interviewer:** Interesting. While the dollar and US bond yields are rising, we’ve also seen a surge in Bitcoin. How do you interpret that?
**Sarah Thompson:** It’s a fascinating phenomenon. As uncertainty in traditional markets often leads to increased interest in cryptocurrencies, Bitcoin’s rise reflects a mix of speculative trading and a desire for alternative assets. Investors may feel that with Trump’s policies potentially leading to inflation, Bitcoin serves as a hedge against traditional fiat currency fluctuations.
**Interviewer:** You mentioned optimism surrounding tax cuts and tariffs. Can you elaborate on how these expectations are shaping trader behavior?
**Sarah Thompson:** Certainly. Traders are banking on the expectation that Trump’s Senate victories will lead to substantial tax reforms and tariffs that favor specific industries. This speculation is encouraging traders to increase their positions in stocks likely to benefit from such policies, further driving market indices upward, particularly in Europe, where the response has been overwhelmingly positive.
**Interviewer:** With this market exuberance, do you have any concerns about potential long-term implications?
**Sarah Thompson:** Yes, while the initial reaction is positive, there are concerns about sustainability. Rapid growth could lead to an overheating economy, especially if inflation takes root. Policymakers will have to tread carefully to balance growth with price stability. Additionally, the political landscape is always evolving, so investor sentiment can change quickly.
**Interviewer:** Thank you for your insights, Sarah. It will be intriguing to see how these dynamics continue to unfold in the coming months.
**Sarah Thompson:** Thank you! It’s definitely an exciting time in the markets.