Populist politicians usually tone down their rhetoric when in office and disappoint their core fans. Donald Trump’s economic policies are a case in point and it could be the markets that are left disappointed. A week on from the election investors are making big risky bets on ‘Trumponomics’ working.

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In equities, there is a clear Trump trade. The big risers on the FTSE in the last few days are all tied to Trump policies - Antofagasta (copper), BAE Systems (defence), Ashtead (construction), CRH (construction).

Meanwhile bond markets have soured on the prospect of Trump-led inflation, although the selloff seems to have abated somewhat as investors pause for breath. Insurers and banks like Prudential and Barclays have been rising in tandem with bond yields and the prospect of higher rates.  The big US banks are all powering higher on hopes that we are seeing inflation and yields rise. Markets are pricing in a 90% chance that the Fed will hike rates in December in response, although policymakers were already very close to raising the federal funds rate.

Bonds have turned south and yields are rising – hardly high by historical standards but there is a belief we are entering the ‘great rotation’ out of bonds and into equities. This should have happened already but central bank QE has meant bonds have continued to perform well even as equities have cranked higher. The bet that many are making now is that bonds will be dumped and equities bought up.

But what are the real prospects for Trumponomics? It looks like a case of buying the rumour - will investors sell the fact when it comes along? These are big bets on a set of policies that are neither detailed nor assured.

Populist politicians nearly always disappoint when they come up against political gravity, and it would be reasonable to assume that many aspects of Trumponomics won't be quite as it is billed now. When Trumponomics meets hard economics, there is surely only one winner.

He's already watering down the Mexican wall ambitions - (some fence in places, less cement). Trade wars no longer look certain, with advisors talking down any prospect of punitive tariffs on China. Even bits of Obamacare are to be kept. The demagogue becomes the democrat. What is left is more infrastructure spending, and more on defence, but how can we know for certain what shape any of this will take?

Big risky bets on Trump's economic policies coming off may look good now but these are huge assumptions that investors are making and the reality might not match expectations. Reversals in the last week's moves in stocks and bonds are possible. Whether the bond market selloff has run its course will depend a lot on what Trump delivers – and how the Fed decides to react.