Newspaper article The Queensland Times (Ipswich, Australia)

President May Not Be the Trump Card

Newspaper article The Queensland Times (Ipswich, Australia)

President May Not Be the Trump Card

Article excerpt

I'D LOVE to be able to write a column that doesn't mention Donald Trump, but right now that's still pretty much impossible.

As yet, we don't have a clear idea about what kind of economic policy he will be able to run.

Yes, he did campaign on promises to cut taxes and boost infrastructure spending, but details are as yet scarce. Nevertheless, US share prices have surged since the US elections on the view that the Trump administration will boost economic growth.

More recently however, markets have become a little more sceptical, and rightly so. Markets seemed to have run way ahead of themselves.

It's not clear that the Trump presidency will be as positive for growth in the US and the world than markets seem to think.

Even if Trump is able to cut taxes and boost infrastructure spending substantially, other countries are not likely to follow suit, so the global impact is likely to be limited.

And a substantial easing in fiscal policy at this point makes it more likely that US interest rates increase further and faster than markets currently anticipate. …

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