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Before the November election, the conventional wisdom was that Donald Trump was bad for the economy.But a month into his presidency, consumers are still spending, US businesses are still hiring,and Wall Street is enjoying its longest winning streak since 1999.
We asked Mark Zandi ,“did the experts get it wrong?”“No…”
The Moody’s Analytics chief economist stands by his original assessment.Because from a policy prospective, Zandi says the president has yet to deliver on his campaign promises.
“What he wanted was 11 million undocumented workers to leave the country.What he wanted was a 45 percent tariff on China, 35 percent on Mexico. What he wanted was tax cuts and government spending increases that would increase the budget deficit by $10 trillion over 10 years.So if that’s what he got, that would lead to a recession.”
But others say the record run-up in stock prices reflects renewed investor optimism under Trump,most of it driven by expectations of corporate tax cuts and fewer regulations,says PNC senior analyst Gus Faucher on Skype.
“So they are expecting stronger U.S. economic growth under President Trump, both real growth —that is after inflation — but also perhaps higher inflation, and that’s going to boost profits as well.”
But enthusiasm surrounding Trump’s economic agenda may be waning.
Goldman Sachs says investor confidence may have reached its peak.And Kevin Kelly at Recon Capital Partners says markets are close to a tipping point.
“Now, it’s focusing on, OK, are we going to get deregulation or are we going to get taxes?Are things going to be weighing for a while? You know, is it going to be a second half of the year story?So I think that’s what’s kind of seeping into the market right now.”
Mark Zandi says economic impact of Trump presidency may depend on Republicans in Congress.They favored tax cuts, and criticized government spending in deficits. But if lawmakers approve big tax cuts, economists ask, who’s going to pay for an infrastructure jobs program, or a giant border war？
Mil Arcega, VOA news, Washington.
