For ECB and Fed, Trump complicates decisions on rate policy

FRANKFURT, Germany (AP) — Donald Trump's surprise election victory has helped solidify expectations for an interest rate increase next month by the U.S. Federal Reserve — but may have complicated a decision for the European Central Bank, which faces a difficult choice over more stimulus.

[...] in part because of the calm that's prevailed in stock markets since the election, traders have put the likelihood of a rate hike next month at 81 percent, according to the CME Group.

[...] if the idea of infrastructure spending catches on in Europe, it could help the economy there too, particularly in the 19-country eurozone.

Since the global financial crisis, the monetary union has focused largely on cutting spending.

Ultra-low interest rates — one product of the stimulus — have reduced returns on savings, pushed investors into riskier markets like stocks and real estate, and increased pressure on pension programs.

— A repeat runoff election for president of Austria on the same day could bring right-wing populist Norbert Hofer of the Freedom Party into office.

All that uncertainty could depress business activity as people await the outcome of the votes, says IHS Global Insight economist Howard Archer.