Adar Capital Partners, which primary macro hedge fund manages assets in excess of $1bn (€9.2bn), considers that interest rates will go up 0.25% in the short term to reach 1.75% in 2017, following the arrival of Donald Trump as US president.
In the opinion of Diego Marynberg, the president of Adar Capital, Trump will concentrate mainly on developing the US domestic economy, strengthening infrastructure and making use of fiscal policy, which will result in higher rates in the medium term set against a fear of increased inflation, which will impact the behaviour of the Fed and central banks.
In Latin America, Adar Capital foresees above all an economic upturn in Argentina and Brazil and a more unfavourable situation in Mexico. The value of certain financial assets will fall slightly. Other countries, such as Cuba and Venezuela, will not be too much affected in principle by the Trump era and will remain stable as regards their monetary policy.
Marynberg believes that Trump will be very positive, since Obama’s Democratic government tended to interfere in its internal affairs in an inappropriate way. With Trump, according to Marynberg, Israel will enjoy more freedom of movement to pursue its own policies.
In Marynberg view, the future president Trump has an initial advantage over Obama insomuch as he has a better understanding of the dynamics of the economy and enjoys the broad political support of both legislative chambers. However, as there are many asset bubbles and starting from negative interest rates, the market will make some moderate corrections during the first months of 2017.
The president of Adar Capital also believes that new technologies and the widespread use of the internet will lead to growing volatility in the taking of investment decisions. The media and opinion polls are no longer good predictors of who will win a vote, as we have seen in Brexit, in Colombia and now in the United States. Consequently, investment decisions will also continue to be taken at the last moment.