US: Markets have priced in most of the positives and not enough of the negatives - Rabobank

Analysts at Rabobank note that Trump’s plans to increase spending on infrastructure, reduce tax rates, slash regulation, and liberalize the energy sector should boost the US economy in the coming years. 

Key Quotes

“However, increased government spending and lower tax revenues may also push up the public debt trajectory. This could hurt the long-term outlook for the US economy.”

“What’s more, Trump’s trade policies could backfire rapidly and undermine the positive impact of his fiscal policy initiatives. Finally, his micromanagement of business investment decisions may have a negative impact on the domestic business climate.”

“On balance, it seems that financial markets have priced in most of the positives and perhaps not enough of the negatives.”