Market Perspectives | Sailing MAGA 2.0

Highlights:

• Trump’s MAGA agenda keeps markets on edge. His reluctance to impose universal tariffs immediately after inauguration has provided some relief.
• Political uncertainty and volatility will remain high, but our core assumption remains that Republicans will want to avoid creating another large inflation shock. We maintain a moderate pro-risk tilt amid a still conducive backdrop of solid global growth, further rate cuts and receding inflation.
• Our preference is for IG Credit and to a lesser extent for Equities, at the expense of Cash. We increase duration exposure in the EA as the drag from lower inflation, economic stagnation and further ECB rate cuts will partially unwind the recent rise in yields.