Impact Of Election Results On Financial Outlook: Insights From Steve Wyett

A month after the presidential election, the financial landscape continues to evolve, influenced by President-elect Trump’s victory and other global events. Steve Wyett, chief investment strategist for BOK Financial, breaks down the potential impacts on the economy moving forward.

Wyett noted that the capital markets have responded positively to the election results, with a general outlook that growth could improve in the coming years. However, he acknowledged the uncertainty surrounding policy changes, particularly as the nation enters a period of significant transition.

“We’ve entered a high-change environment,” Wyett said. “The differences in the policy platforms of the two candidates were stark, and now that the election is settled, there are big areas of potential change that could bring about anxiety for both individuals and businesses.”

Tariffs and Trade Relations

One key topic that dominated the campaign was tariffs, particularly on trading partners like Canada, Mexico, and China. Wyett explained that tariffs are a tool used not only by the U.S. but also by other countries, though they have not historically been beneficial to economic growth. He believes current tariff discussions are primarily aimed at negotiations.

“With Mexico and Canada, tariffs were more about influencing policies, such as controlling immigration and drug flows,” Wyett said. “With China, however, the situation is different. It’s clear we need more production and distribution within the U.S. or closer to home, and President Trump has shown a willingness to implement tariffs as a negotiating tool to ensure reciprocal trade access.”

Inflation and Interest Rates

When it comes to inflation, Wyett pointed out that while inflation is improving, reaching the Federal Reserve’s 2% target might take longer than anticipated.

“Higher growth might slow the decline in inflation, but that’s not necessarily a bad thing,” he said. “The Fed is likely to cut interest rates by 25 basis points at its next meeting, but rates may not go as low as initially expected due to the stronger-than-expected economy.”

Wyett also noted the latest employment data, which showed a slight uptick in the unemployment rate to 4.2%, while wages continue to grow at around 4% annually.

“That wage growth makes it harder for the Fed to lower interest rates aggressively,” he said.

Stock Market Outlook

Wyett encouraged investors to stick with their plans as the stock market continues to show strong growth.

“The market had a significant jump on election night, and even with a month left in the year, we’re already looking at a record year for stocks,” he said. “While returns may not be as high as the 20% gains seen this year, we’re still optimistic about earnings growth, particularly in small and mid-cap stocks, as we head into 2025.”

Despite the uncertainties surrounding the policy changes of the incoming administration, Wyett remains positive about the economic outlook and encourages investors to stay the course.