As the 2024 presidential election approaches, Wall Street investors are betting on former President Donald Trump’s economic policies to benefit Americans. A recent Politico report highlights the growing optimism among investors that Trump’s promise to lower taxes and reduce regulations will lead to economic growth and increased prosperity.
According to State Street’s MediaStats Election Indicator, spreads between two-year and 10-year Treasury notes are becoming more sensitive to Trump’s favorability, indicating that investors are pricing in the potential impact of his policies on inflation and growth. Noel Dixon, a global macro strategist at State Street, attributed this trend to rising inflation expectations, suggesting that Trump’s policies, including across-the-board tariffs and mass deportations, would drive up prices.
Trump’s stance on illegal immigration is seen as a key factor in his economic plan, with investors expecting his policies to lead to higher wages for American workers. Under Trump’s administration, businesses were incentivized to pay living wages to their employees, which would not be the case under President Joe Biden’s economic policies.
Trump has repeatedly pledged to impose strict tariffs on imports and promote U.S.-made products, which could lead to a surge in domestic manufacturing and job creation. Michael Faulkender, the chief economist at the America First Policy Institute, pointed out that the stock market performed well under the Trump Administration, dispelling claims from Democrats that benefiting American workers would harm investors.
Faulkender believes that the right set of policies can improve outcomes for both investors and workers, citing Trump’s record as an example. “With the right set of policies, we can improve outcomes for investors and workers alike. That was the record under President Trump, and that’s what I expect the second term to go back to,” he told the Daily Caller News Foundation.
