InternationalInvesting

Does healthy economic growth lie ahead?

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The temptation to get into the Trump mud-wallow is overwhelming, hence all the more reason to back away and look at the whole market/economic picture, and over time. Election day and beyond On election day the financial markets expected gridlock to continue open-ended -- hardly an ideal circumstance, but comfortable and predictable, as gridlock had been the state of affairs most of the time since mid-Clinton twenty years ago. By midnight at the end of election day, markets began to re-price, assuming that one-party government would break the gridlock and at least some campaign promises would take effect. The re-pricing -- the “Trump Trade” -- was different for stocks than bonds, although financial media conflate the two. Credit markets re-priced for hotter economic growth, or at least attempts at heat (spending and tax cuts), and the presumed heat also accelerated guesses at the Fed’s rate-hiking. Faster economic growth means higher risk of inflation, and bonds and the Fe...