A U.S. election shock

Take a deep breath

November 9, 2016

In yet another blow to the pollsters and pundits following failures to predict the UK general election and Brexit outcomes, the Republican Party has swept the U.S. Congress and the Oval Office with President-elect Donald Trump winning the election. The 115th Congress and the White House will be controlled by the GOP for the first time since the 109th Congress in 2009-11 under then President George W. Bush. Global financial markets are taking it negatively as the world economy suffers a blow to confidence and uncertainty escalates. It is important at times like this, however, to inject a note of caution to such knee-jerk reactions. There are clear negative consequences for parts of the global economy and markets, but there are important mitigating offsets that may get lost in the immediate aftermath only to be reconsidered later. As the net effects are digested by markets, political and policy guidance will be of paramount importance from world leaders including but not limited to the newly elected US President in the very near term and through the first 100 days of the new administration.

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