Well that was unexpected. November had been shaping up to be a quiet month of reflection for the housing market and mortgage rates as investors waited to see whether the Reserve Bank-induced slow-down was just temporary and whether banks would pass on yet another Official Cash Rate cut. Instead, Donald Trump was elected US President and a 7.8 magnitude earthquake cut off Kaikoura and badly shook the nation’s capital. Both events have changed the economic and financial outlooks. Trump’s election is set to destabilise 30 years of globalisation, which has underpinned fast-rising asset values and ever-falling inflation rates as growth in trade turbo-charged emerging economies and pumped up property and stock markets.
His election has already unleashed the fastest rise in long term interest rates in nearly 8 years. President Trump promised to slash corporate and personal income taxes while unleashing an infrastructure spending spree. Doing both at the same time is a recipe for a blowout in budget deficits and a jump in US Government borrowing.
His election has already unleashed the fastest rise in long term interest rates in nearly 8 years. President Trump promised to slash corporate and personal income taxes while unleashing an infrastructure spending spree. Doing both at the same time is a recipe for a blowout in budget deficits and a jump in US Government borrowing.
