The ‘Trump Trade’ Is Still Moving Markets but How Long Can It Last?

Republican Donald Trump’s election win quickly pushed up US stocks, the dollar and Bitcoin — reshaping the outlook for investments as he prepares to return to the presidency in January. The “Trump trade” is set to hang over markets, with his disruptive policy agenda of tariffs, tax cuts and deregulation driving big moves across the global investment landscape. The era could get even more volatile with Trump looking to break norms on everything from free trade to Federal Reserve independence.

But how much further can the Trump trade go? Assets from stocks to corporate bonds look expensive relative to history, and protectionist policies threaten to refuel inflation. On top of this, the US economy already faces a ballooning fiscal deficit and a softer labor market that could weigh on growth prospects. And remember: in his first term, key wagers — like betting on small companies and the US dollar — petered out.