The anticipation of a more active fiscal policy is based on the assumption that President Trump will reinvent the package of policies known as Reaganomics. Not without reason. Most importantly, during much of his first administration loose fiscal policy collided with a tight monetary stance as Paul Volcker’s Federal Reserve sought to squeeze inflation out of the system.
This resulted then in a seriously overvalued dollar. The strength of the dollar since the Trump election is justifiably based on that historic analogy. It seems that there are two differences, however, between the Reagan administration and the Trump one. Reagan was fortunate in taking office in 1981 just after the second oil crisis tipped the economy into recession.