15 May Trump’s policies & the equity risk premium – the good, the bad & the ugly
Key Points
- Helped by President Trump’s backdown on tariffs, shares have rebounded to within 3-4% of their record highs.
- The good news is that the last month highlights that Trump is still sensitive to share market falls and worries of recession. The bad news is that the tariff mayhem could still flare up again once the 90 day pauses end.
- The bigger worry is that his erratic policy making & threats to US institutions could weaken longer term share returns. Against this, though, he is likely to pivot to more positive supply side policies which could work the other way.
