All three major indexes (^DJI,^GSPC, ^IXIC) are rising in premarket trading after former President Donald Trump secured a second term and won the presidential election against Vice President Kamala Harris. Doug Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office from 2003 to 2005, joins Julie Hyman and Seana Smith to discuss the expected economic impact of Trump's victory and why it is driving U.S. stocks higher.

“The most striking difference between the Biden administration and what probably would have been the Harris administration and Mr. Trump is certainly in the area of ​​regulation. The Biden administration has imposed $1.7 trillion in costs on the private sector in less than four years.” That’s twice as much as Obama did in his four years as president. There is simply no reason to believe that things will be different on the regulatory front next time,” Holtz-Eakin tells Yahoo Finance.

He adds that there is “clearly good news of an extension of tax cuts and possibly lower corporate taxes,” although “the question of what happens on the tariff front” remains as Trump's plans represent a “headwind to growth.” Holtz-Eakin says assessing the impact of Trump's tariff plans will depend on which party controls the House of Representatives.

Another significant impact of Trump's re-election concerns immigration. “There will be attempts to change the legal immigration system to minimize immigration to the United States. Deportations are a wild card. He promised to deport 11 million people during the 2016 election campaign. That never came about. We did some work back then that promised that.” It will cost $400 (billion) or $500 billion and take about 20 years. None of that happened, so I'm keeping an eye on that too. The immigration plans that Trump promoted during the election campaign could have an impact on the labor market and thus also on inflation pressure.

For more market reaction to the 2024 election, click here.

This post was written by Naomi Buchanan.