Mkt volatility partly driven by structural changes

The US election results will have major implications on the global economy and markets. With Donald Trump's victory and Republicans taking control of the Senate, tax cuts, deregulation, and tougher trade policies are expected, says BEN POWELL, chief investment strategist for West Asia and Asia-Pacific (APAC) at BlackRock Investment Institute. In an email interview with Samie Modak, Powell shares his insights on the US economy, the Federal Reserve's (Fed's) decisions, and the broader global economic outlook. Edited excerpts:

- BEN POWELL

What impact does the US election result have on the world economy and markets? Donald Trump has won the presidency, and Republicans are retaking control of the Senate. A Trump win opens the door for tax cuts, deregulation, and tougher trade policies. House control is key. Elevated budget deficits are likely to push inflation higher and raise long-term Treasury yields.

In the short term, we expect US equities to benefit from solid economic and corporate earnings growth, political stability, and Fed rate cuts.

The longer-term outlook depends on how much of Trump's agenda is enacted. We believe the energy, financial, and technology (tech) sectors will see some advantages, partly due to deregulation.

We're neutral on long-term US Treasuries and prefer medium-term maturities and high-quality credit for income, but we expect yields to rise as investors seek higher compensation for holding bonds.