Following the debate and an assassination attempt, former President Trump’s reelection prospects have risen. Plus, there’s growing momentum for a red sweep. Rather than delve into the odds, our goal is to answer several frequently asked questions about the extension of tax cuts, tariffs, and Federal Reserve (Fed) independence.
Trump increases uncertainty long before the elections
“The election outcome remains uncertain, but there is undeniable momentum for Trump. Is “Trump 2.0” a term of redemption or a term of revenge? Many find comfort in the U.S. economic and market performance during Trump’s first term, at least until the onset of COVID-19. During that time, similar themes of tax cuts, tariffs, and Fed independence were prevalent.”
“Extending the 2017 Tax Cuts and Jobs Act (TCJA) tax cuts could increase the deficit by $4.6 trillion over the next 10 years. Official deficit projections must assume that the tax cuts will expire as legislated. It is important to consider that, in terms of the effect on growth, allowing the tax cuts to expire would be similar to raising taxes by the same amount over the same period.”
“Trump imposed tariffs in 2018 that raised inflation fears. We reexamine the consequences and offer some thoughts on the outlook going forward. Moreover, in a Trump 2.0 we should expect the Federal Reserve’s independence to be tested, but count on the Fed to remain focused on its mandated objectives until any new legislation is passed by Congress.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
