Donald Trump Owns This Stock Market
It wasn’t smart to dump a dovish Fed chief, run up the deficit, and start a trade war. Trump did all three.
Bloomberg, December 10, 2018
For those of you who are looking for an explanation why the stock market suddenly become tumultuous in the fourth quarter of 2018, you can stop searching: Blame President Trump.
This is a giant reversal for me.
I have spent the better part of the past three years warning investors not to allow their personal, partisan, political preferences to poison their portfolios. This administration’s policies, passed as legislation by Congress, and implemented by the executive branch, have driven interest rates higher, made the deficits greater, led to a trade war, and is risking a global slowdown and even recession.
Haven’t I been that objective analyst who always cautioned readers against seeing markets through a political lens? When Trump was elected, and people of a crash – I explained why that was so much nonsense. I keep reminding readers that all presidents get too much credit when things go right and too much blame when they go wrong. The market and the economy are both so large that the most Presidents typically do is have some impact around the edges.
That sanguine view of the presidency had the caveat that yes, presidents can screw up. Any POTUS can make things much worse.I assumed the President’s aggressive style, economic ignorance, and personal peccadilloes would not leave a mark on either stocks or bonds. Now, almost three years later, the chaos surrounding this presidency proves that was wishful thinking on my part.
I was wrong.
At the risk of engaging in narrative fallacy (with a soupçon of hindsight bias), let’s consider three distinct policies of this administration, and how they are negatively impacting the economy and markets . . .
I originally published this at Bloomberg, December 10, 2018. All of my Bloomberg columns can be found here and here.