House, Senate and White House will all be Republican in January
For eight years Republicans have been ranting about fiscal discipline. In eight weeks that will all go out the window as they take over the US government.
Politicians love power and there is no better way to stay in charge than to spend money. It will start out as infrastructure spending (maybe even wall-building) and will escalate from there.
There is global trend towards higher deficit spending and with US 10-year yields at 1.73%, it's a cheap time to borrow and spend. I see a future of unbelievable deficits as they cut taxes, spend more and try to make America great again.
It might not be worth all the expense but it will work and after the dust settles and everyone calms down, US growth is going to strengthen.
Naturally, the timing is everything and I don't see any rush to buy the dollar, probably not this month at the very least.
The flip side is that trade is that anything is possible with Trump so we will have to keep a close eye on whether his actions match his rhetoric (and what Congress lets him get away with).
