Eyes on the Economy
US Deficits and Tariffs: Clues from Trump’s Nominees
Dec 4, 2024
Avery Shenfeld discusses the implications of Trump’s economic nominees on federal deficits and bond markets. Concerns about rising deficits are juxtaposed with mixed economic signals affecting treasury yields. The podcast delves into the uncertainty surrounding U.S. trade tariffs and their potential impact on relationships with Canada and other trading partners. Conflicting views within the administration on tariff effectiveness highlight the complex economic landscape. The conversation wraps up with insights into future economic trends.
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Quick takeaways
- Concerns about increased U.S. deficits under the new administration initially caused volatility in treasury markets, but recent key appointments have calmed investor fears.
- The uncertainty surrounding Trump's cabinet's stance on tariffs could complicate trade relationships and impact the broader economy moving forward.
Deep dives
Impact of U.S. Election on Financial Markets
The U.S. election results prompted initial volatility in treasury markets, with a sell-off largely influenced by concerns over potential increases in deficits under the new administration. Early fears centered around a surge in borrowing requirements causing long-term interest rates to rise. However, recent market rallies have been attributed to the stabilization provided by key appointments within the Trump administration, suggesting that drastic deficit increases may not materialize. Notable figures like Scott Bassett, the nominee for treasury secretary, have signaled commitment to maintaining fiscal discipline, which appears to have calmed jittery investors.
