Edmond de Rothschild Asset Management's Chief Investment Officer Benjamin Melman warned that a victory for Donald Trump in the upcoming US presidential election could trigger a surge in long-term US Treasury yields. 

Speaking at a press conference shared by Reuters, Melman pointed to Trump's proposed policies on taxes and immigration, which he believes would exert great pressure on the US labor market and economy.

Since the June 27 debate between Trump and President Joe Biden, where Trump gained ground, ten-year US Treasury yields have climbed to their highest levels in over three weeks, nearing 4.5%. 

Analysts interpret this rise as reflecting increasing market anticipation of a potential Trump presidency.

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Why Rothschild Think Trump's Presidency Could Push Inflation

Melman acknowledged the inflationary implications of Trump's agenda, particularly his tariffs on imports, potentially including steep levies on Chinese goods that could lead to price hikes for American consumers and drive inflation upward. 

Trump has also proposed extensive deportation measures targeting criminals and aiming to repatriate millions of individuals to their home countries.

Jacques Aurelien Marcireau, co-head of equities at Edmond de Rothschild, emphasized the immediate impact on market risk pricing as perceptions of Trump's electoral prospects strengthened.

Rothschild's current investment strategies are centered around bond markets. They use "carry strategies," profiting from interest rate differences between financial assets. At the same time, investing in hybrid debt instruments that blend characteristics of stocks and bonds is also part of their expertise.

As someone knowledgeable in this area, their assessment of Trump's presidency's impact aligns closely with the views of other analysts.

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