In light of the results of the recent US Election, the market has had time to react to the new presidency. Donald Trump was always the wild card, making many investors weary of his policies, since there hasn’t been many specific plans set. It was predicted that the market would crash as low as 13 % by some sources, however the morning after the DOW Jones, Nasdaq and S&P 500 were all up around 1%, after dropping slightly after the results were shown. Even though the US Election slightly affects the market, this was the first time a significant drop was predicted.
The Federal Reserve was planning on raising the interest rates in December 2016, however the US Election may affect this plan significantly. Before the election there was an 84% chance of an interest hike, however this has now dropped to a 76% chance. Still high, but a big difference nonetheless. Due to the uncertainty of the President’s policies on all things economical, trade related, and international relations, the market is seeing high amounts of volatility. However, if Trump goes forward in tax-code overhaul and infrastructure spending, this could mean policies would be passed to foster growth, meaning such an interest increase could be accelerated instead of delayed.
While the Fed seldom discusses the US Election, due to the uncertainties of the future, Fed President Patrick Harker commented saying: “it may be prudent – and I emphasize ‘may’ be prudent – to wait until we resolve some of the uncertainty”. The Fed will be meeting mid December, where hopefully some of the uncertainty has died down.
We understand that this is a rather tumultuous time for everyone. If there is anything we at Vermont Mortgage Company can do to help put your mind at ease, or to answer any questions you may have, please don’t hesitate to call us at our office – 802-863-2020, or give us a visit at our office on College St. in downtown Burlington!
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