Followinghis win in Pennsylvania and earlier victories in other key battlegroundstates in Georgia and North Carolina, Republican candidate Donald Trump took tothe stage shortly after in Palm Beach, Florida.

Trump is set to become the 47th President of the UnitedStates (US) as he took an early victory lap on stage and expressed gratitude tohis family, friends and team. Interestingly, alongside Grover Cleveland – thefirst Democrat elected following the Civil War – Trump is the second presidentto serve for a second non-consecutive term for four years.

In a surprising turn, Trump’s victory speech was relativelysubdued; no threats of tariffs were mentioned, and he did not refer to hisopponent, Democratic candidate Kamala Harris, who postponed her scheduledspeech at Howard University. ‘Winning the popular vote was very nice’, Trumpsaid in his speech, adding: ‘America has given us an unprecedented and powerfulmandate; we have taken back control of the Senate’.

Several members of Trump’s team and friends were invited tospeak on stage. His running mate, JD Vance of Ohio, thanked Trump for allowinghim to ‘join you on this incredible journey’. Vance added, ‘I think we justwitnessed the greatest political comeback in the history of the United Statesof America’.

Dana White, the CEO of the Ultimate Fighting Championship(UFC), also addressed the nation, stating, ‘Nobody deserves this more than him[Trump]’. He remarked that Trump ‘is the most resilient man I have ever met’.

Elon Musk, CEO of SpaceX and Tesla, also receivedsignificant praise from Trump, voicing his appreciation and calling Musk a‘super genius’, emphasising that ‘we have to protect our geniuses’. Musk hasbeen vocal in his support for Trump and reportedly invested over US$130 millionin his campaign.

Foreign leaders applauded Trump for his victory. UK PrimeMinister Keir Starmer congratulated Trump and said he looks forward tocollaborating with Trump in the years ahead. India's Prime Minister NarendraModi took to the platform X to convey his wishes as well, emphasising hisdesire to strengthen the partnership between the two countries. Additionally,Israeli Prime Minister Benjamin Netanyahu described Trump's win as ‘history'sgreatest comeback’ in his post on X.

What Does Donald Trump’s Victory Mean for the US?

Donald Trump will be inaugurated on 20 January 2025 at theUS Capitol building in Washington, DC. Americans can expect tax cuts,immigration controls and tariffs.

A Trump presidency will also likely mean lower taxes, a movewith plans for widespread changes to taxation, which should increase spendingand spur sentiment, at least in the near term.

In his own words, Donald Trump’s second term is expected tobe ‘nasty a little bit at times, and maybe at the beginning in particular’.Trump has promised an aggressive approach towards illegal immigration in theUS, which could include plans of mass deportation of undocumented migrants,noting that he ‘will launch the largest deportation program in American historyto get the criminals out’.

Trade tariffs are another one of Trump’s policies that theUS economy can expect, as he is expected to increase the protectionist policieshe introduced in his first term. However, as noted, he failed to address thisin his victory speech today.

Another important issue that Trump and the team must addressis the debt ceiling (or debt limit), which is the maximum amount of money theUS Treasury can borrow to pay its debt obligations. You may recall that the‘statutory debt ceiling’ was suspended in early January and is due to bereinstated on 1 January 2025. This may involve the Treasury drawing on itsexisting cash to fulfil its short-term obligations until another suspension ofthe debt limit is imposed or the debt ceiling is further increased.

Trump Trade is Alive and Kicking

Markets responded as expected, reigniting the Trump Trade,with the US dollar (USD), US Treasury yields, US equities and digitalcurrencies all catching a strong bid.

Despite moderately fading session highs, the US Dollar Indexis up 1.5%, which could eventually see the Index aim for June peaks at around106.13, closely followed by 106.52, the high for the year. US Treasury yieldsremain underpinned, with the benchmark 10-year yield holding near session highsaround 4.42% (up 3.5%).

While commodities experienced a selloff, we have seen amodest recovery unfold, drawing spot gold (XAU/USD) and WTI oil off sessionlows. In the crypto space, versus the USD, Bitcoin clocked a fresh record highof US$75,415 (up 6.4%), and Ethereum is up nearly 9.0% and testing the upperboundary of a symmetrical triangle, pencilled in from US$2,062 and US$2,790.