Donald Trump's second presidential term continues to disrupt the US investment landscape. With policy specifics still evolving, investors must balance caution with opportunity.
"While immediate market reactions often dominate headlines, it's essential to recognise that meaningful policy changes take time to materialise," says Justin White, portfolio manager at T. Rowe Price.
Sectors like financials and small caps have surged on expectations of deregulation, while long-term bond yields reflect inflationary concerns. "A push to ‘run the economy hot', combined with pressure on the Federal Reserve to cut rates, could contribute to rising inflation," White explains.
While economic momentum may continue in the near term, the limits of rate cuts remain a key risk.
Amid policy uncertainty, White emphasises a disciplined, risk-managed investment approach. "Infrastructure projects, such as US housing, present compelling opportunities for selective investment," he notes.
Read the full article to explore how US fiscal policy could shape markets in the years ahead.
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