Impact of Election Results on Financial Outlook: Expert Insights

The financial landscape is shifting following the recent presidential election, with President-elect Trump’s victory influencing market growth and sparking cautious optimism about tariffs, inflation, and interest rates. Steve Wyett, the chief investment strategist at BOK Financial, explains how these changes may impact our economy moving forward.

Wyett notes that the capital markets have responded positively to the election results, signaling potential growth in the years ahead. However, he acknowledges the uncertainty surrounding policy changes during this period of significant transition. “We’ve entered a high-change environment,” Wyett emphasizes. “The stark policy differences between the candidates could bring about some anxiety for individuals and businesses.”

One significant topic that emerged during the campaign was tariffs, especially concerning trading partners like Canada, Mexico, and China. Wyett clarifies that while tariffs have been historically unfavorable for economic growth, current discussions may primarily serve as negotiation tactics. “Tariffs can influence various policies, such as immigration and drug control, with Mexico and Canada,” Wyett explains. “But with China, focusing on domestic production and distribution is crucial, and President Trump may use tariffs as a bargaining chip for equal trade access.”

Regarding inflation, Wyett suggests that reaching the Federal Reserve’s 2% target might take longer than expected, despite improvements. He anticipates a 25-basis-point interest rate cut at the next meeting, though the strong economy may prevent rates from decreasing as much as predicted. With a slight increase in the unemployment rate and steady wage growth, aggressive interest rate cuts may be challenging.

As for the stock market, Wyett advises investors to stay the course amidst its robust growth. “Following a significant surge on election night, this year is on track to be a record-breaking one for stocks,” Wyett affirms. While next year’s returns may not match the 20% gains of this year, he remains optimistic about earnings growth, especially in small and mid-cap stocks as we move into 2025.

Despite the uncertainties surrounding the incoming administration’s policies, Wyett maintains a positive outlook on the economy and encourages investors to stay committed to their investment plans.