According to the latest edition of Gallup’s Economic Confidence Index, Americans have much more optimism about the future of the economy than they did before Donald Trump was elected president. For the first time since March 2015, the Index has turned positive, soaring from a (-10) evaluation to a (+3) virtually overnight.
According to Gallup, the turnaround is almost entirely due to a change in optimism among Republicans, who have been sharply critical of Barack Obama’s economic direction.
“After Trump won last week’s election, Republicans and Republican-leaning independents now have a much more optimistic view of the U.S. economy’s outlook than they did before the election. Just 16% of Republicans said the economy was getting better in the week before the election, while 81% said it was getting worse. Since the election, 49% say it is getting better and 44% worse,” Gallup said.
While Americans are looking forward to a brighter economic future under Trump, Wall Street experts and investors are waiting to see how his administration shapes up before casting judgement. Trump’s campaign promises were well-received on Wall Street, but investment strategists know as well as anyone that promises are made to be broken. For now, however, the market appears to be responding favorably to Trump’s victory.
Trump has built his message around cutting taxes and deregulating the lending industry, while simultaneously promising to simplify the tax code and take away certain breaks for hedge fund billionaires. On the corporate side, he has pledged tax cuts on the one hand while warning of punishing tariffs for any company that moves manufacturing out of the country.
Many expect House Speaker Paul Ryan to shape the direction of the American economy once Trump is in office; his budget plans bear more than a passing resemblance to the days of the Reagan economy. That alone would be a major cause for celebration on Wall Street and could send the Dow skyrocketing.
It’s all speculation for now, though, and the only thing we know is that millions of Americans are expecting big things from the Republican monopoly in Washington. If ever there was a chance to prove to every voter how conservatism works economically, this is it. Blow it, and our majority will be short-lived.