A surprise election. This is how Donald Trump's triumph in the US presidential election turned out. Many people considered the polls to be decisive, but this was not the case on this occasion. On the contrary, there were those of us who saw the odds of bets that gave the former president as the winner, at about 60%.

The majority opinion is that this triumph will have dire consequences for the different economies, especially the Chilean one. Without detracting from the multiple reasons for that, it is important to consider some different edge that may make us think completely the opposite, or at least to plant the "reasonable doubt", as lawyers say.

There is much talk of higher inflation, but the truth is that at the end of 2019, the cost per gallon of gasoline was around 2.5, while today it is over 4.

In a recent mid-year interview, then-candidate Donald Trump mentioned that the black gold the U.S. had should be commercialized. If this were to materialize -probably through the so-called fracking-we should see a decrease in the price of this commodity. commodity and, in turn, have a second round disinflationary effect on the economy, in about nine months to a year. Recall that it was precisely during the pandemic that the US became a net importer.

Another campaign promise was to lower taxes. Many warn that this will lead to lower tax collection, which is not always the case, since -in certain scenarios- lowering taxes increases the tax collection base. A counter example of this is the Tax Reform carried out in the first half of the last decade in Chile, which ended up generating a lower tax collection in the face of an increase in the tax burden.

A third element is the geopolitical factor. When President Trump took office in 2016, the world feared widespread warlike conflicts, with the United States playing a leading role. Experience proved completely the opposite. In fact, and very unfortunately, armed confrontations came in this outgoing administration.

With a recent unprecedented escalation in Europe, let us hope that the new-former president will use his good relationship with Russia to reach a long-awaited peace agreement. This would certainly bring relief to grain prices, as Ukraine is called the "breadbasket of the world". This would be another disinflationary factor in the world.

While it is true that inflation has eased - and not only in the US - we are still at high levels, which keeps the Federal Reserve (FED) rate at 4.5%-4.75%, which is far from the average of the last 15 years, close to 2%. If we consider that the effects of the pandemic are transitory, we should see it converge sooner rather than later to levels close to 2%.

With lower rates in the U.S., risk appetite should increase in the rest of the world, causing economies like ours to benefit from foreign investment - much needed these days - where economic growth, to say the least, is not good.

In terms of the so-called "trade war", the measures announced against China could hit the local economy in a bad way, especially since China is a very important trading partner. Here it is key to highlight that the government that arrives to La Moneda in 2026 -regardless of the political sidewalk- sees the opportunity to strengthen ties and make up for the setback we have had with Washington, something in which Argentina is ahead of us. The ability to be able to generate meeting points with the new administration could be essential to mitigate the effect of such protectionist measures.

It is perhaps a vice of my training to look at things with a historical perspective and look for patterns that repeat themselves. In that sense, I consider it important to take into account that, in October 2016, Donald Trump is surprisingly elected as president in the United States; in 2017, Sebastián Piñera (Q. E. P. D.) is elected in Chile; and in February 2018, the dollar traded below $590, its lowest level since 2014.

As a final piece of information, we should remember that the last time we saw the dollar trading below $700 was in May 2021. That is not that long ago, but a not insignificant 40% lower than current levels.

All of the above does not imply that it will necessarily happen that way; however, sometimes it is necessary to analyze phenomena from a different point of view than the consensus. Sometimes, what the majority thinks may end up being the opposite; something like the polls prior to the U.S. presidential elections.

Who knows, perhaps we could have an exchange rate well below the current highs.

Gustavo Gallardo, CMT

Assistant Manager of Sales and Trading Fynsa Money Desk