Marko Papic sees rising US bond yields, Fed cuts in 2025 amid economic slowdown

economictimes.indiatimes.com:

«It is just that there is so much uncertainty it is not really worth us thinking about how much or where, but I do think that he has to surprise the markets and he will have to be quite firm early on because it is useful as a tool of negotiating to really be aggressive early and then be able to use that to negotiate with other countries in terms of policies that he wants them to abide by,» says Marko Papic, Chief Strategist, BCA Research.

Let us talk about Donald Trump. He takes charge next week. What do you expect from him? You think he is going to follow up on his pledges about tariffs, tax cuts, and immigration. What is your own sense and do you think it was just perhaps rhetoric?
Marko Papic: Macro investing is pretty difficult because not only do you have to get the direction of markets correctly, but also what is the most important issue that the market will focus on? The market cannot focus on everything at the same time and I think that too many investors are trying to combine all of Trump's policies and figure out their inflation, market, and economic impact. I think that the market is going to continue to focus as it has been on fiscal policy, that means how much will President Trump and his cabinet expand the budget deficit and thus far the market has assumed that the US will continue to spend at a pretty significant clip.

In other words, fiscal policy will be very stimulative and you can see that the bond market has reacted to that already with yields rising quite fast and I think that that has had a