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Investing.com — UBS sees a combined outlook for monetary markets in 2025 as traders grapple with uncertainty over the financial insurance policies of a second Trump administration. Key questions heart on whether or not the strategy will lean extra populist MAGA or fiscally conservative DOGE, with important implications for markets and the broader economic system.
MAGA insurance policies, characterised by tariffs, deregulation, and deficit growth, may gain advantage labor however pressure capital. Whereas, DOGE-leaning measures, specializing in deficit discount and personal sector-driven development, might provide a extra constructive funding surroundings.
UBS predicts a tilt towards DOGE, citing Trump’s historical past of supporting markets and curbing extreme reflationary insurance policies.
Nonetheless, intra-party divisions and financial coverage debates, together with upcoming finances and debt ceiling negotiations, add to the uncertainty. Markets are prone to expertise volatility and stay range-bound till coverage readability emerges.
UBS expects 2025 to characteristic stable U.S. GDP development, gradual disinflation, and additional Federal Reserve price cuts, which ought to in the end assist equities and bonds. Whereas near-term uncertainty might hold markets on edge, UBS believes Trump 2.0 insurance policies usually tend to profit monetary markets in the long term.
