By: One World Publishing
The dust has settled on one of the most important presidential elections ever. While President-elect Trump may be controversial on several key issues, the consensus is that his administration’s economic policies are going to be good for the finance sector.
Here’s a look at some anticipated changes that could be coming this term and what top financial chief executive officers (CEOs) think about the economic benefits of those policies.
Anticipated Tax Reforms
President Trump’s administration plans to expand the Tax Cuts and Jobs Act of 2017, which initially reduced the corporate tax rate. The proposed continuation and deepening of these cuts aim to boost corporate profitability and encourage reinvestment in the economy. Such measures could help create jobs and increase consumer spending.
Deregulation Efforts
A hallmark of the Trump administration has been the reduction of regulatory burdens on key industries, including finance, energy, and manufacturing. The continuation of these efforts is expected to create a more business-friendly environment and reduce compliance costs. Supporters of deregulation anticipate that the move will make the U.S. more competitive in key industries.
Delta CEO Ed Bastian is one of the many executives who are excited about the possibility of deregulation. When discussing Trump’s commitment to ease regulations, Bastian said that the president-elect has promised to “take a fresh look at the regulatory environment, the bureaucracy that exists in government, the level of overreach that we have seen over the last four years within our industry. I think that will be a breath of fresh air.”
Financial Sector Perspectives
Industry leaders have expressed mostly positive sentiments regarding the potential impact of a second Trump term. During a sitdown with Bloomberg, Citi CEO Jan Fraser drew attention to the “Four T’s” of Trump administration policies that Citi and its clients are most focused on. Those four T’s are:
- Tempering of regulation
- Taxes
- Tariffs
- Tightening immigration
Fraser said that as Citi looks across the board to assess the implications of these changes, she would categorize the policies as part of a “largely pro-growth agenda.”
Similarly, Ty J. Young, CEO of Ty J. Young Wealth Management, offers an optimistic perspective:
“As a result of the Trump win and Trump policies, the economy will likely accelerate very quickly. When the evidence of that acceleration comes back in the form of data, I believe that the Fed will continue to lower interest rates through 2025… and maybe beyond.”
Market Reactions
Following the election, markets have shown varied responses. Investors have propelled stock prices upward. Stocks in the banking and energy sectors have experienced significant growth and are expected to benefit from lower tax rates and lighter regulation.
The consensus in the financial sector is that a second Trump term should be good for banking, energy, and other foundational industries. However, it will be interesting to see which issues make the transition from campaign trail rhetoric to meaningful policy changes.
Considerations and Outlook
Ty J. Young and several other CEOs have a very optimistic outlook about the economic repercussions of a second Trump administration. As Young puts it:
“A Trump win is a win-win-win scenario. With Trump policies, the economy will do better. As a result, the stock market will climb, and the Fed will likely lower interest rates. Everybody wins.”
Financial leaders are closely monitoring the potential impacts of a second Trump administration’s policies. Pro-business measures may stimulate economic activity and help investors regain some of the ground they’ve lost during the volatility of the last few years.
With that in mind, now is a great time to consider your personal retirement or investment strategy and speak with an experienced wealth manager. The market is trending in a positive direction and could afford you an opportunity to move closer to your financial goals.
Published by Joshua F.
