The November 2024 US presidential election looks likely to be a contest between the same people as in the previous one in 2020, with President Joe Biden as the Democratic Party candidate and former President Donald Trump as the Republican Party candidate. Under a Trump presidency, economists at Nomura would expect a flare-up in inflation, the abandonment of moves toward carbon neutrality, and heightened geopolitical risk.

Major market implications from policy about-face in event of second Trump presidency

Should President Biden be re-elected, the risk exists of frequent standoffs over the debt ceiling or a government shutdown, but our main scenario for overall policy is a continuation of the status quo. Should Mr Trump return to the White House, however, we think the market implications of policy shifts would be major.

We think that a major consequence of a second Trump presidency would be renewed upward pressure on inflation. In addition to Mr. Trump’s eagerness to lower the corporate tax rate and other taxes, we would also expect (1) the nomination of a dovish chair of the Board of Governors of the Federal Reserve System (2026), (2) protectionist trade policies (higher import costs), and (3) moves to halt the influx of migrants (supporting higher wages). We would also expect a rewinding of the support for decarbonization and renewable energy that has been advanced by the Biden administration. Furthermore, diplomatically, we think global geopolitical risks could grow if a Trump administration were to pursue isolationism