Schroder: US inflation and uncertainty about the new policies may make fixed asset returns attractive
2024-12-23 13:52
Zhitongcaijing
Schroder believes that, considering the impact of the new US policies on the future and the possible inflation it may bring, investors can focus on the infrastructure of renewable energy for investment.
Schroders Global Investment has stated in a recent article that even though US President-elect Trump still has two months before officially taking office, he seems determined to quickly advance his agenda at the start of his second term. Considering the impact of new US policies on the future and the potential inflation they may bring, Schroders Global believes that investors can focus on the renewable energy infrastructure sector. Currently, global technology companies and utility companies are already investing heavily in this area and are expected to benefit from these rapidly growing trends. The bank believes that there is a clear synergy between traditional real estate and core renewable energy infrastructure investments, which can attractive investment opportunities that release long-term value.
Schroders Global expects that the US still has a broad range of fiscal policy options, but the overall effect may be slightly more optimistic for the local economy compared to pre-election expectations. It is also possible to see a more aggressive fiscal stimulus policy than was expected in a divided US Congress. The real impact of these potential new policies on the US economy is likely to be seen after 2026, but the fiscal plans for 2025 have already been roughly determined.
Schroders Global believes that the potential impact of Trump's new policies on economic growth is uncertain and will depend on their scale, timing, and implementation order. Looser financial regulation and more accommodative fiscal policies will provide support, but stricter immigration controls and potential plans to deport illegal immigrants could have negative implications for labor supply and lead to stagflation. The impact of tariffs varies across industries, but generally speaking, this mainly taxes global growth.
However, potential new policy measures are expected to lead to a rising trend in inflation. The Federal Reserve has become more challenged in stabilizing and maintaining low inflation in the medium term. Currently, there is a higher likelihood of authorities pausing the rate-cutting cycle earlier than expected, leading to increased forecasts of an "unlanded" economy.
Nevertheless, the market is showing strong demand for increased investment and development to expand data center capacity. Additionally, in order to sustainably meet the increasing demand for electricity, the supply of renewable energy must be increased accordingly. While global technology companies have already made significant investments in this sector, the market still eagerly awaits more funding, especially from investors who are optimistic about the industry's long-term prospects.