Markets afraid of inflation
Dow Jones industrial index went up right after Donald Trump won presidential elections. This Republican nominee became very famous for his intention to focus more on the national industry, closing the borders for international trading.
During last week Dow Jones gained 5.4 percent, and it is the highest peak since 2011. As for the S&P 500 index, it received 3.8 percent to the total income and reached the two-year peak.
Trump gave its promise some time ago to make the regulations at the financial and health sectors simple for anyone. So, investors have focused on the bank and medicine stocks, waiting for the actions of the newly elected president.
The new perspective with the Republicans heading the Congress is that Trump will be able to lower the taxes and spending for the infrastructure sector. Investors believe that he will be able to find out the way to escape deadlock in the policy.
Trump has said many times that he is ready to increase the import tariffs and to deport migrants from the USA.
Expectations of the new wave of inflation are getting bigger.
Prediction for the new inflation went up by 2.46 percent of the chances that it will happen in the nearest future.
We still don’t know the new decision of Fed, which will have to say officially whether they are going to increase the interest rates this year in the next meeting. However, spread betters give 70 percent chances that Fed will raise the rates until the end of this year.