US – Post Obama America: for better or worse

Clinton will win the presidency for two reasons. She provides a semblance of normality compared to the hot-headedness of Trump. Secondly, the Electoral College system, where Clinton leads in most key states, lifts her chances of winning above what would be the case if things were decided by share of the national vote. Although Clinton’s ascent is rather late in the macro cycle, there is still some juice in it. But with growth weak and inflation coming back relief should be short-lived. A combination of (even slow) Fed tightening and a rising tax burden adds risks to growth, risks that higher fiscal spending will struggle to offset. With equity valuations already elevated, we remain short. A story of rising interest rates with quickening inflation should be positive for the US dollar.

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