The election of Donald Trump was followed by what many called “The Trump Trade.” Based on the promises made by Trump during the campaign: to lower taxes and reduce regulations – two factors that inhibit economic growth – the stock market rose sharply. But it’s going to take time and a lot of hard bargaining to actually get to the point where real economic benefits result.
Brian Wesbury, Chief Economist at First Trust:
As we wrote three months ago, it’s going to take much more than animal spirits to lift economic growth from the sluggish pace of the past several years. Measures of consumer and business confidence continue to perform much better than before the election. But where the economic rubber hits the road, in terms of actual production not so much. It looks like real GDP growth will clock in at a 1.3% annual rate in the first quarter.
He says that we still have a “Plow Horse Economy” and it will take time to unhitch the plow and saddle up the “Racehorse.”
Trump has signed a number of executive orders that will have an impact on regulation, but the bureaucracy is still staffed with the last administration’s appointees and the pace of approving new appointments is glacially slow.
Waiting is the hardest part.