As Donald Trump returns to the White House London’s blue-chip FTSE 100 traded close to all-time highs on Monday.
Investors have been waiting for Trump to return back to the White House and are eagerly waiting to learn of his stance on international relations.
On Monday the FTSE 100 nudged up by 0.2% and Trump has vowed to sign executive orders on energy tariffs and immigration from day one of being back in office.
There is concerns with traders over his threats of tariffs on China and other countries which could impact global growth and flame inflation.
Susannah Streeter, head of money and markets at Hargreaves Lansdown said, “There’s inevitably a lot of focus on what the impact could be for the global economy when higher tariffs are introduced. UK investors should brace for some volatile patterns of trading on the financial markets,” she warned.
“However, it’s important to remember that investing takes endurance and patience and that the stock market has historically risen over the long term.”
Trump raising tariffs could lead to higher prices for items in US stores and this could in turn limit interest rates being reduced.
Streeter said, “This, in turn, may add to clamour for higher wages. Already, concerns that this will drastically limit the Federal Reserve’s capacity to bring reduce interest rate has rattled bond markets, pushing up government borrowing costs.”
She added, “Many imports used in an array of goods which are bought on wholesale markets are priced in dollars, which will be more expensive if the greenback takes on more muscle.
“This could push up the prices of an array of some products on the shelves. If countries hit back with tariffs on imports from the US, that could also push up consumer prices.”
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