Enthusiasm for "Trump deal" cools as market worries over whether his tariff proposal can be implemented

Investors in some asset classes are gradually reducing their enthusiasm for the "Trump trade" as they question whether Trump will push through his ambitious tariff proposals as president of the United States. As of Thursday's close, the dollar had erased most of its post-election gains, and U.S. Treasury yields had returned to recent ranges after two days of sharp fluctuations. These moves indicate that the market may be volatile as investors weigh whether Trump's policies are in line with his campaign promises. As market shocks subside, the focus is turning to other major events. A key question on investors' minds is how many of Trump's threatened tariffs will become a reality. Some are also taking profits, including bullish dollar and bearish Treasury trades that performed well earlier this week on expectations that Trump's policies will stimulate inflation and keep interest rates at higher levels. Alvin Tan, head of Asian foreign exchange strategy at RBC Capital, said, "People are skeptical about whether Trump will actually implement the policies he proposes, especially tariffs. However, this sentiment may be temporary because the market underestimates Trump's influence on trade policy-the U.S. president has broad powers to impose import tariffs." (Jinshi)