'Bad news for stocks': Trump will raise taxes, not cut them- strategists

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'Bad news for stocks': Trump will raise taxes, not cut them- strategists

BCA Research economists have challenged the prevailing market expectations regarding the impact of a potential second term for President Trump, suggesting a shift from anticipated tax cuts to increased taxes through higher tariffs.

With bond yields already over 4%, a budget deficit at 7% of GDP, and the trajectory of federal government debt being unsustainable, moderate Republicans are expected to resist policies that could worsen the fiscal situation. On the other hand, fears of the Fed inflating away the debt could drive long-term bond yields higher.

 

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