What Trumps election could mean for Canadian rates and the loonie – National [Video]

Experts say Donald Trump’s election victory could shift interest rate policy in the U.S. as his promised policies risk higher inflation, which could ultimately have implications for Canadian rates and the loonie.

Among those promises are large tariffs on imported goods, especially from China, as well as lower tax rates and lighter regulation.

Trump has promised that with him as president, “inflation will vanish completely.” But some have raised concern that his economic policies could actually put upward pressure on inflation, and in turn, slow the pace of interest rate cuts expected from the U.S. Federal Reserve.

“Tradition tells us that that increase in tariffs will increase inflation in the U.S.,” said Sheila Block, an economist with the Canadian Centre for Policy Alternatives.

Higher inflation would mean the U.S. Federal Reserve could be slower to cut interest rates, and markets are already shifting their bets on how low the central bank is likely to go on rates.

“If you’re enacting …