US: Trump’s presidency optimism started to wane – Deutsche Bank

Analysts at Deutsche Bank feel that optimism about Trump’s presidency has started to wane but events in the coming weeks could be crucial for Trump’s policy agenda.

Key Quotes

“About five months into Trump’s presidency, there is some evidence that optimism is starting to wane

− Consumer confidence is still elevated but has started to roll over for Republicans

− Market inflation expectations have fully retraced the rise from “Trump reflation” hope”

“There have been some setbacks to Trump’s agenda

− Russia investigation dominating headlines

− So far lack of legislative “wins” on some key issues (e.g., health care and tax reform)

− Challenges to travel ban”

“But agenda moving forward in some key areas

− Supreme Court nominee approved

− Deregulation ongoing, e.g. Treasury plan to ease capital cost of some assets would support credit”

“The coming weeks will be key for Trump’s agenda

− Senate likely to vote on health care reform bill

− Form and timing of tax reform could depend on health care outcome”

“Our base case remains that deregulation and some modest fiscal stimulus will add a few tenths to growth in 2018.”