Donald Trump is both the biggest risk and the biggest stimulus for the American economy. It is extremely controversial images and the incentive for the market came from its probative focus. This was commented by Pavel Bandilov, financial analyst from Sofia International Securities, in the program Invest/Or of Bloomberg TV Bulgaria with leading Radina Koleva.
Bandilov pointed out that former President Barack Obama also wanted to push through fiscal incentives, but he came across opposition in the face of Congress, which was controlled by the Republicans. “So it should be easier for Donald Trump to push through fiscal policies,” the expert noted.
“But his behaviour in terms of statements on protectionism, wall building and Twitter communication is something that worries the market a lot for the simple reason that a sense of chaos is being created,” said Bandilov.
According to him, the market is skeptical of the administration’s intentions in the face of Finance Minister Stephen Manucin to present a draft tax reform by the end of August. “So from this point of view, the Fed is left to act, if not with both eyes closed, then with at least one, because in this environment he does not know how things will turn out,” he adds.
Pavel Bandilov also commented on Wednesday’s Federal Reserve decision to raise interest rates by 25 basis points. In his words, President Janet Yellen’s rhetoric was “a little bit more robbed.”
“Against the backdrop of the data that came out the last two months, the market believed it would see four interest rate hikes this year. From the statement it was clear that we can expect two more promotions,” said Bandilov.
He pointed out that the markets expected Fed to announce intentions for three more interest rates hikes because of data on the labour market, retail, production and consumer inflation, which were surprising in a positive sense.
“Besides the listed indicators that the Fed was following or at least commenting on during the press conference, there are two indicators that are not at this height that the Fed wants to be. This is about business investments and productivity and labour pay. So there’s still some weakness there,” said Bandilov.
You can see the whole conversation in the video:
