Finance Associated Press November 6th news (Editor: Zhao Hao) On local time Wednesday (November 6th), Republican presidential candidate Trump won more than half of the electoral votes, securing victory in this year's U.S. presidential election. At the same time, the Republicans have won control of the Senate, with only the House of Representatives still undecided.

Impacted by this news, the u.s. 10-year treasury notes yield, known as the "anchor of asset pricing," rose by 18 basis points intra-day, reaching a high of 4.479%, the highest level since July. The 2-year U.S. Treasury yield, most closely linked to the Fed's rate expectations, rebounded to its highest level since August.

As the U.S. bond yields rebounded, the usd index surged by 180 points intraday, surpassing the 105 mark, pressuring non-u.s. currencies and a range of commodities priced in dollars. Analysts believe that Republican control of the Senate is sufficient for Trump to shift U.S. economic policy, potentially raising deficits and inflation.

Seema Shah, Chief Global Strategist at Principal Asset Management, stated that concerns about rising deficits have led investors to sell U.S. bonds. "We need to monitor changes in bond yields. If yields continue to rise, a tipping point may be reached."

Trump has mentioned multiple times that he intends to reduce the U.S. corporate tax rate from the current 21% to 15%, while imposing at least a 20% "global benchmark tariff" on all imported goods. Analysts predict that tariffs will trigger an inflation rebound, narrowing the Fed's future rate-cutting space.

Many analysts had previously predicted that regardless of whether Trump or Harris takes office, the U.S.'s budget deficit and government debt levels will surge, but they also generally believe that under a Harris administration, the amount of debt increase by the U.S. government may be less than in a Trump scenario.

Samuel Tombs, economist at consultancy Pantheon Macroeconomics, believes that even if Trump only imposes a 10% tariff on imported products, it may raise the inflation metric favored by the Fed - the core PCE price index - by about 0.8 percentage points.

Due to the upward risks of inflation expectations, traders have lowered their expectations of a rate cut by the Federal Reserve in 2025, which is also one of the main reasons for the rise in U.S. bond rates and the U.S. dollar index. CME Group's 'FedWatch' tool shows that the market expects the end of the rate cut cycle to be at 3.75%-4.00%.

Later today, the Federal Reserve will begin a two-day policy meeting. Although a 25 basis point rate cut this time is almost certain, Sit Investments executive Bryce Doty believes that the outcome of a Trump victory has made the Fed's 'overall mission more complex.'

Doty said: 'The constantly rising national debt is putting the Federal Reserve in a dilemma. Should they lower interest rates to save national funds, or maintain interest rates above normal levels to counteract the inflation impact of massive government spending?'

Journalist Nick Timiraos, also known as the 'New Fed Communication Agency,' recently published an article stating that Trump's election victory currently will not affect the Fed's monetary policy stance, but if the Republicans continue to 'sweep' both houses, the wording on 'basic assumptions' at the December meeting may be revised.

It is worth mentioning that there were previous reports stating that the Trump team has long planned to 'deal' with the decision-making level of the Federal Reserve. Trump economic adviser Scott Bessent mentioned that the approval of the next Fed chairman could be advanced by a year, causing Powell to lose influence during the remaining term.