Upcoming Trump Presidency Sends Economy Outlook High As The Greenback Hits A New Height
Investors remain optimistic days before president-elect Donald Trump takes his seat as the 45th president of the United States on Friday. The upcoming event led to bullish positions on the country’s growth and inflation, including a rise in the prices of commodities and market stocks among others.
Donald Trump has spurred the country’s economy, sending the greenback to its highest climb since 1970 since the announcement of his presidential victory against opponent Hillary Clinton.
The positive notes on the economic growth have recently led to the outlook to hit a two-year high as more fund managers and survey results revealed that economic growth might exceed a 3% increase or 4% until 2018. President Barack Obama has failed to hit a rise in the economic growth by more than 2% during the duration of his two terms becoming the only president who failed to hit an economic growth higher than 3%.
Most of the slow outlook for the economic growth is widely believed to have been caused by a constant unemployment rate at around 4.5%. During his campaign period, Trump has strongly spoken about his plans to increase employment within the country by encouraging US companies and manufacturers whose production take place in other countries to transfer the plants in the US instead. As early as late 2016, Trump has spoken to company officials promising tax and regulation cuts to those who will transfer full production in the country.
Despite the shock that the stock market showed following the results of the presidential elections, American stocks have jumped back to new highs next to the fed reserve interest rate hike.
Stronger Greenback
The recent upward tick that the US dollar has shown over the past month has also driven bullish outlooks in the stock market and an assurance of a stronger buying power. Although recently, Trump stated in an interview that he believes that the dollar is too strong and that it might affect American companies who are trying to compete with China.
Trump then said that he will bring the dollar down should he thinks the economy needs it and also added that he believes that a stronger greenback has more disadvantages than advantages to the economy of the country.
Overview of Trump’s Plans
Aside from Trump’s plans to increase the employment in the country through the incentives given to companies who will shift production from outside the US, a tax reform to improve the ability of companies in the country will lure in more investors from the global scene as a much more relaxed tax regulations will not threaten the chance to invest in multi-national companies based in the country especially those coming from the Silicon Valley.
Trump also plans to increase infrastructure spending in his motivation to overall tackle the issue of increasing unemployment in the nation. The infrastructure investment bill is highly believed to be of the administration’s top priority this year.
Meanwhile, one of the most anticipated steps that the market is expecting the president-elect to take action on is a regulatory reform, another plan Trump has actively spoken about during the course of his campaign.
Currently, the top threat to the nation’s economy is Trump’s view on where the dollar should be headed. While it is obvious that even though most companies do not favor the new administration, the markets still value Trump’s opinion and acknowledges his power among different companies and as Trump is about to be sworn to office, the stance of the economy remains optimistic even after the official change in administration.