Well, here we are. The U.S. now officially has a “new-same” president following the inauguration of President Trump. Things are about to change and change BIG. But what are those changes and will they all come to fruition? Many of the promises made by the new president will be fairly easy to implement, others harder while some will never see the light of day. The point is, what happens now?
Financial markets have been salivating over most of the changes President Trump has proposed. Not only salivating but pricing in the next “Golden Age” of the nation. Equity markets seem to have no top. Interest rates don’t know whether to be higher or lower. Bitcoin is certain up is the answer. Oil? Sanctions say supplies will tighten with higher prices, “drill baby drill” means more supply and lower prices. Got it?
President Trump is signing executive orders as fast as he can write. The anti-Trump lawyers are jumping up and down (while filing objections) and milling around the Ferrari dealerships.
Just how many will come to fruition quickly or be tied up for quite some time? Uncertainty abounds and its only day two of the inauguration.
So what are the “easy” ones, the slam dunks? Certainly opening the energy markets (drilling, pipelines, offshore exploration, etc) can be done quickly. How about changing the name of the Gulf of Mexico to the Gulf of America? Shouldn’t be too hard. There is the South China Sea, the Sea of Japan, the Persian Gulf, the Indian Ocean, etc etc. A couple of calls to the mapping folks, a good eraser and ta da…..the Gulf of America.
Regulatory reform? Well, that’s gonna take a bit of time. First you have to get rid of the current regulators, appoint new ones and then fight the anti-Trump lawyers who, as mentioned, are busy at the Ferrari dealership. More uncertainty.
Then there is the “DOGE” (Department of Government Efficacy) initiative. Elon Musk and company may very well find that $2T cost savings BUT there will be pain. Certainly there will be layoffs, and economic cutbacks which probably will result in some form of economic slowdown.
Inflation. It has not gone away. Will it accelerate with new policies (like tariffs) or ease with an economic slowdown. Has 3% inflation become the new 2%? What oh what will the Fed do? A President vs Fed Chairman confrontation?
So, here we are. The “Golden Age of America” may be here or some time off. Financial markets just say buy buy buy. Correct? No? What now? Who knows.
