What will be the future of the US economy under President Trump

March 26, 2017

By: Ramjeet Brar

Recently in an article by Reuters, many outcomes of the Feds new outlook under the

Trump Administration were presented. The Federal Reserve is planning on increasing its

interest rates that are supported by the U.S. Dollar. Moreover, with the new Trump

Administration, new plans are going to be set in place. One particular change might be a

reduction in drug prices, shortly after Trump tweeted about this change, shares of Pfizer

Inc (PFE.N) and Amgen Inc (AMGN.O) had dropped by approximately over 1%.

The US dollar has also been increasing against other major currencies such as the British

Pound (GBP) and Swiss Franc (CHF), which the US dollar saw increases of 0.29 and

0.14 against respectively. Likewise, with the strong US dollar, US Treasury yields have

also seen an increase and many investors are anticipating a Fed rate hike soon.

The monthly U.S. job report also had good news, showing an increase of around 190,000

jobs. This significant increase in jobs is speculated to be enough for the Fed to raise its

base rates again. If the proceeds with this change, it will be the second time in just four

months. Many professionals feel that if there is macroeconomic information supporting a

rate hike, the stock market will continue to rally and this will ultimately result in

stabilizing a strong market.

Moreover, 30-year treasury yields are at the monthly high as investors are anticipating

this weeks supply of coupon-bearing government debt, which includes $24 billion in

three-year notes. Treasury Yields have also seen increases because of data signaling that

the U.S. trade deficit has grown to a 5 year high during the month of January.

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