One of world's biggest bond fund managers sounds alarm for US economy, stock market under Trump
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Dan Ivascyn, the chief economic investment officer at Pimco that US equity markets could suffer a reversal after hitting record highs since Trump was elected president. But such “reflationary” policies, in a US economy that already has “a lot of momentum”, have the potential to feed through into inflation, he warned.
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Trump has laid out a broad array of ideas aimed at providing tax reliefs, cutting prices and inflation, hiking tariffs and strengthening the economy. Trump has suggested he would get rid of the cap on state and local tax deductions, known as SALT. He has called for cutting corporate tax rates to 15 per cent for certain companies. Trump has promised an end to taxes on tips. He had said he would impose an across-the-board tariff of either 10% or 20% on every import coming into the US, as well as a tariff upward of 60% on all Chinese imports. He had also promised to reverse course and lower the prices of gas, groceries and other essentials
“It’s not as simple and easy as just a one-way reflationary trade where risk assets should rejoice,” Ivascyn told the Financial Times. “You want to be a little careful about what you wish for,” he said. With US inflation still stuck above the Federal Reserve’s target, “there
