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Financial Expert: ‘Economy Would Take Off’ Under Trump

Donald Trump’s plans to cut taxes and invest in infrastructure projects if he becomes president could stimulate the nation’s financial health, according to one expert.

Bloomberg News reported that David Woo, who is in charge of global rates and currencies research for Bank of America Merrill Lynch, said market officials are beginning to “wake up” to the idea that Trump might win the election in November. The financial strategist predicted that if the Republican nominee is victorious, and the GOP maintains its majorities in the House and Senate, “the U.S. economy would take off in a big way.”

Trump’s tax and spending proposals would spark in increase in the issuance of Treasuries, which would improve the value of the U.S. dollar and spur U.S. Treasury yields, according to Woo. He told Bloomberg TV on Monday: “In the last four years, we have had two instances of massive unwinding of the risk parity-trades. At this point, the risk to the risk-parity trade is just as big.”

Woo previously expressed concern that a Trump victory could endanger the risk-parity strategy, which Bloomberg described as “a long levered position in Treasuries and a long position in stocks to better diversify risk levels across different asset classes.”

Woo suggested that Trump is gaining on Clinton in national and swing-state polls partly because of the recent poor performance of risk-parity trades. However, Bloomberg reported: “It’s difficult to see how the proximate cause for the bond selloff has its roots in the U.S. rather than overseas.”

Source: Newsmax
Photo: 123RF

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