Global Macro Views

That Donald J. Trump’s election to be the 45th US President upended the political world does not imply that it radically transformed the economic outlook. Reviewing our projections for important economies over the next few years provides an opportunity to catch our breath.  Yes, the victory was a surprise to virtually all commentators, even though the vote-share margin was within sampling error in most major polls and a one-in-three outcome in predictions markets (as was the case the week before the election) should be expected to occur, wait for the higher math to follow, one-in-three times. Elections matter, but so too does the momentum of fundamentals in place before the election. A single-party government can engineer meaningful changes in public policy and national attitudes but most of that takes time to get traction, especially legislative initiatives about personal taxes and financial regulation. As for the former, the code is complicated and vested interests entrenched. As for the latter, legislation may change quickly, but regulators and the regulations they wrote roll off the books gradually.

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