Elections often have a big impact on the economy, affecting households and business. Policies that are implemented by a new government can affect tax rates, job markets, consumer confidence and the stock market. For individuals and families it is important to understand the changes and adapt financial strategies. In this article we will explore how the recent election in the United States has impacted the economy, and by extension your wallet.
Tax policy
In the wake of the recent elections, we have seen some adjustments in the tax policy. The changes that the government has implemented directly impact the take home pay of the American.
- Deductions and credits.
We have seen changes in the deductions and credits. For instance, we have seen expanded child tax credits and deductions for education expenses. This will provide relief to families, while impacting the high earners negatively.
- Adjustment in tax brackets
We have seen that the marginal tax percentages have stayed relatively the same, compared to the percentages from last year.
Inflation and consumer spending after the election
- Rising prices. In some sectors, like houses, energy and food, the prices have risen a bit. We see that lower income families are struggling to make ends meet, especially in areas where the cost of living is higher.
- Changes in interest rates. To work against the inflation, interest rates are often used. This directly affects the cost of borrowing. Whether you are financing a home, a car or using a credit card, changes interest rates affect everyone.
Investment opportunities and the job market after the election
The choices of the current administration have led to several opportunities in the stock and job market. This is because they have prioritized certain policies and sectors, which impacts where jobs are being created and how stocks and investments are performing.
- Green energy and technology
With Donald Trump and Elon Musk partnering together during the elections, we have seen that the focus has been on cryptocurrencies and the blockchain. This is also something we have seen directly impact investment, for instance when looking at the stock price of Bitcoin. The use and mining of cryptocurrencies goes hand in hand with the use of green energy.
- Products manufactured in America
The new administration is a strong supporter of domestic production and the increase of infrastructure. This had led to new job opportunities and several investment opportunities.
Because the election was very recent, not all policies have become clear. When policies and new rules become clearer, the volatility in the financial markets will stabilize in certain sectors, and can offer long-term investment opportunities.
Conclusion
Elections bring change, and with changes come both opportunities and risks. By understanding how these changes can impact you and your personal finances, you can make sure that you benefit from them, while mitigating your risks. By targeted investing, strategic career moves and smart budgeting, you can find success in these uncertain times.