Bill Gross, a renowned investor, has warned that a second Donald Trump presidency could negatively impact the bond markets. Gross pointed out that Trump’s tax cuts and spending programs have the potential to worsen the fiscal deficit. He noted that while Joe Biden’s presidency has also seen significant deficit spending, Trump’s potential reelection could be more disruptive.
In 2016, Gross did not vote for Trump or his opponent, Hillary Clinton. He recently commented on the US fiscal deficit, pointing out that it is driven by a large issuance of Treasury bonds that are now necessary to drive economic growth. This has led Gross to shift his focus away from traditional bond strategies and towards alternative investments like oil and gas pipelines and tobacco stocks.
The upcoming US presidential election has the two candidates proposing vastly different tax plans that would impact the fiscal deficit. Biden’s plan involves raising the corporate tax rate, while Trump’s plan aims to maintain the current rates established by the Tax Cuts and Jobs Act of 2017. The outcome of the election will have significant implications for the bond markets and the broader economy.
As investors prepare for the November elections, they are weighing up
