So far, the Trump economic plan has built optimism in the financial sectors, CEOs, and consumers as reflected in soaring stock prices and a robust housing market.
In their January meeting, the Fed revealed that “many” officials supported raising rates “fairly soon,” so long as the economy kept chugging. But after raising its benchmark rate in December for the second time in a decade, the Fed was wary of adding another increase due to “considerable uncertainty,” (inflationary impact) of the Trump Administration’s expansionary fiscal policy.”
In the past 6-months, the rate on 10-year Treasuries has jumped a full point, to 2.43%. And 60% of that the increase came in the three months +/- following the election.
Central to this concern is how rising interest rates will impact U.S. Housing. Economists and business leaders consider the housing industry to be the most accurate bellwether of the overall economy. And healthy housing indicators continue leading the entire economy from a 10-year recession.
The initial enthusiasm and euphoria have reached a critical point. This week President Trump is spelling out the details of his economic plan for the nation. As the saying goes, “the devil is in the details.” Undoubtedly, this is the most important speech of his tenure as President.
All eyes and ears are fixed on Washington as we gain insight and analysis of what lays in store. Hopefully, he will temper his approach with solid tax, trade, fiscal & social programs with thoughtful caution and wise judgment.
After slipping and sliding through 10 years of stagnation and melancholic optimism, we deserve and rightfully expect much more. We have not survived thus far to be shortchanged by underperforming promises.
U.S. consumers have thrown their enthusiasm and money behind their optimism and are poised for greater economic times. It’s time for Washington and the States to stoke the economic engine.
*Via Economic Focus