The US economy was strong based on government spending. US consumers were not happy.
The US stock market is different from the real US economy.
The elections result was a message of the average joe American consumer who was feeling the economy was bad despite plain employment indicators and the stock market climbing with GDP growing at 3% for two years in a row.
With the new administration and its team you need to forget the person of the president, polemics, because people are judging Trump as personality and missing what he is doing.
The guy he brought for Treasury Secretary, Scott Bessent, understands monetary policy, fiscal policy and macroenomics. Scott Bessent explained in a CBC piece, that what they are doing:
They got an economy whose strength was the public sector. the previous administration inflated the government machine, that inject money into the market and was very loose in fiscal policies and his predecessor, Yellen, did a terrible job in the 4 years
Trump is diminishing the size of the government and increasing the size of the private sector. In a short period, like now, it get worse as the people and companies sucking the US government teats scream and shout.
The economy is slowing down, creating more unemployment in the short term.
And the market is reacting. The market read, last year, what Trump planned to do and bet on it But in this moment the market discovered that these measures were not done in his first 2 months in the job and these speculators are now unwinding those positions |
