Trillions Of Dollars Hinge On Trump’s First Speech To Congress
Investors will be hanging on every word of President Donald Trump’s first actual speech to Congress Tuesday night, an event which may dramatically impact financial markets.
Trump promised a number of market reforms over a year ago during the presidential campaign that major investors eagerly anticipate. Following the president’s unexpected election win, domestic markets experienced record-setting gains, the U.S. dollar strengthening, bond-yields are high, and hopeful expectations for future growth are mirrored in rising inflation targets.
Investors are reporting they need more confirmation than simply verbal commitments from the president to squelch fears that the “Trump bump” isn’t merely a fleeting market occurrence, Bloomberg reports. Thus far, the president has a demonstrable habit of making grandiose promises, but is generally slow to implement policies commensurate with his rhetoric, e.g. “phenomenal” tax reform.
Other than signing a few executive orders, beginning with the repeal of Dodd-Frank and a key Department of Labor rule, Trump appears hesitant to make any other major moves towards tax reform or deregulation. Trump insisted Monday morning that tax reform is not an option until the White House and Congress can push through a plan to “repeal and replace” Obamacare.
Health care reform has to come first because it has such drastic effects on the tax code, the president said at a press conference prior to meeting with various governors about health care reform Monday morning.
Secretary of the Treasury Steven Mnuchin promised that Trump’s first budget proposal to Congress will make its first appearance in Trump’s Tuesday evening address. The speech could raise some red flags for investors, as Mnuchin said the budget will not include any cuts to major entitlement programs, like Social Security and Medicare.
In all, investors will likely receive some good news in Tuesday night’s speech. The budget will include the promised cuts to the tax brackets from seven down to three, and to “create a level playing field for U.S. companies to be able to compete in the world,” Mnuchin said Sunday.
Americans can expect to hear in the president’s address Tuesday a speech “grounded in solving real problems for real people,” according to a preview of the address obtained by The Daily Caller News Foundation.
Investors will likely also be pleased to hear that one of the key points the president plans to address is “tax and regulatory reform to get relief to hardworking Americans and American businesses.”
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