Trump’s economic policy: It’s about to get real – Nomura

Research Team at Nomura suggests that with the new US congress convening shortly, and President-elect Trump’s inauguration on January 20, we are likely to learn a lot relatively quickly about how US economic policy is actually going to change in 2017. 

Key Quotes 

“Since the election, financial markets have been adjusting to the prospect of significant changes to US economic policy in 2017 under the incoming Trump administration and Republican Congress. But to date, all this analysis has been hypothetical, based on an unusually large set of assumptions about what policies will be enacted and when.”

“That is about to change, and the fog of uncertainty should soon begin to diminish. We should learn a lot about the Republicans’ legislative agenda for 2017 after the new Congress convenes next week. Further, we expect President-elect Trump to “hit the ground running” when he is sworn in on January 20 and by the end of January we should have a much more concrete sense his priorities. That will be important. But it will not answer all, or even most, of the important questions about how the economy is likely to perform in 2017 and 2018.”

“Knowing the priorities is only the first step in a long, contorted policy implementation process. For instance, we do not know the degree to which Trump’s economic agenda will be constrained by Congress, other parts of the Federal government, or other factors. Also, we do not know how the economy will respond to the policies that are implemented, especially as some of the policy proposals break with traditional conservative policy orthodoxy.”