Wall Street readies for potential Trump win, bracing for inflation spike and bond sell-off

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Wall Street is already positioning itself for a Trump victory in the upcoming election, according to a Fortune report. Investors are adjusting portfolios, anticipating significant economic shifts if Trump re-enters office.

The market response centers on Trump’s protectionist policies, particularly his push for broad tariffs. Analysts predict these measures would drive up inflation, affecting both American and European markets. European stocks are expected to underperform, as Trump’s tariffs would likely hit international trade hard, especially in the Eurozone.

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Bank of America strategist Meghan Swiber noted that the anticipated Trump tariffs have led to upward adjustments in inflation forecasts. The bond market, in particular, is reflecting this expectation: higher yields signal that investors foresee funding costs rising sharply if Trump implements his policies.

Amid this climate, a major bond sell-off could occur before Trump takes office, as funding costs surge and inflation looms. Wall Street is bracing for volatility, setting the stage for potential market upheavals if Trump’s economic agenda unfolds as expected.

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