Buxton: Trump will win US election

Added 30th September 2016

Old Mutual Global Investors CEO Richard Buxton is predicting a Donald Trump victory, and a subsequent aggressive shift in global fiscal policy.

Buxton: Trump will win US election

Buxton believes the EU referendum protest vote, which shocked financial markets on 24 June and that he himself discounted, “will probably be echoed in the US presidential election.” And that means we will see a big push toward fiscal stimulus, he said.

Both Clinton and Trump have made infrastructure spending a central component of their economic proposals in their bids for the White House. While Clinton’s plan entails spending $275bn over a five-year period, Trump has said he would spend more than double that amount on the nation’s decaying infrastructure.  

The palpable disenfranchisement in the US, similarly evident in the UK and eurozone political narrative of the last year, is really about stagnant income and wage inequality, according to Buxton. Which is why he argues “it is now in politicians’ interest to generate wage inflation.”

“In the US, wages are already running at 3.6% per annum,” he said.

“Employment is still fairly low, although the labour force participation is still lower in the US than it is in the UK. If you start putting fiscal stimulus in the US on top of wages at 3.6%, you could very quickly get that picking up, but they would rather have inflation now than deflation. That all points to me to steeper yield curves."

And Buxton anticipates the UK government will also be more aggressive with its fiscal policy.

“The tectonic plates between monetary and fiscal policy are beginning to shift,” he said.

“Carney’s actions post-EU referendum have been completely counterproductive – he’s eroded bank profitability and helped undermine confidence in insurers’ ability to invest in assets that will match long-term liabilities. This is why I think looking three years out, you will see fiscal stimulus.”

Kames Income Hub

home_research_centre

Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Premier Multi Asset Global Growth - Alex Farlow
Premier Multi Asset Global...

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Kristen McGachey

Senior Reporter

Kristen joined Last Word Media and the world of financial journalism in April 2016, leaving behind a career in a legal publishing firm as a senior researcher turned assistant editor.

This native Angelino initially moved to the UK in 2008 to complete her undergraduate studies at the University of Nottingham. She subsequently obtained a Masters degree in Philosophy with Literature from the University of Warwick.

Profiles

Viewpoint

Investment Strategy

Feature

Tweets

Events

PA Edinburgh 2017
PA Edinburgh 2017

Thursday 7 September
Balmoral Hotel, Edinburgh

PA Alternatives 2017
PA Alternatives 2017

Tuesday 12 September
Sofitel St James, London  

PA Dublin October 2017
PA Dublin October 2017

Tuesday 10 October
Westbury Hotel, Dublin

PA US 2017
PA US 2017

Tuesday 17 October
Furniture Makers' Hall

OTHER STORIES FROM LAST WORD...