Trumponomics will remain an important market influence this year, with investors particularly interested in two things: the transition from announcements to detailed design and sustained implementation; and outcomes, particularly when it comes to the mix between higher growth and inflation.
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.