In the US election, Donald Trump has won 290 of the electoral votes, with „only“ 270 actually required for a victory. This will make him the 45th President of the United States and he will move into the White House on 20th January. The result of what was an altogether very exciting and often highly-personal election campaign confirms the rule that the end of a president’s eight-year period of office is usually followed by political change. And this time too, the party that lost the election was the former President’s party. The majority of voters therefore preferred to place their trust in the Republican candidate and his assurance to achieve stronger economic growth as well as higher wage growth. It therefore comes as no surprise to learn that the Republican Party continues to have the majority of mandates in the two chambers of the Congress.
Backed by the full majority in Congress, the American President has maximum room to manoeuvre; until now, this has only been the case in twelve years since 1968. We doubt, however, that the radical statements of the campaigner Trump will be realised „one to one“. It is almost impossible to predict the extent to which the Republican Party will actually support the plans of „their“ president. But we expect the members of the Congress to ensure that far more moderate and inherently more coherent statutory resolutions are passed.
As this full room to manoeuvre could already get lost in two years‘ time at the mid-term elections, the new President is unlikely to waste any time and will want to realise as many plans within the shortest time possible. And the extent to which the Republican parliamentarians really do support the new president will become apparent very quickly. Much will therefore depend on how successfully he deals with a new government and advisory team as well as with the newly-elected Congress.
Our forecast for the US economy remains unchanged even if the medium-term outlook has deteriorated due in particular to the risk of trade barriers. It also remains to be seen what the programme to strengthen the US economy looks like in detail. Unlike in previous years, the renewed increase in the federal debt ceiling expected in March will be a non-event. All in all, though, we expect budgetary discipline to remain slack in the years ahead, with public debt continuing to spiral upwards.