Former President Donald Trump’s economic strategy, centered on aggressive growth policies, could continue to support strong performance in equity markets. By prioritizing tax cuts, deregulation, and increased government spending, this approach may fuel investor optimism and sustain upward momentum in stock prices. However, such policies tend to raise inflation expectations, which can pressure fixed-income assets. As a result, bond yields are likely to climb, leading to declining prices in that sector. While equities may benefit from robust corporate earnings under this framework, the broader financial landscape could face tighter monetary conditions if the Federal Reserve responds to rising inflation by maintaining higher interest rates for longer. This divergence in asset performance underscores the trade-offs inherent in stimulating growth during periods of already elevated economic activity.
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Trump’s ‘Run It Hot’ Economic Strategy May Keeps Stocks Rolling. Not So Much for Bonds. Barron’s
Trump’s ‘Run It Hot’ Economic Strategy May Keeps Stocks Rolling. Not So Much for Bonds. Barron’s