President Trump Delivers First State of the Union Address
U.S. President Donald Trump delivered his first State of the Union address on Tuesday, where he vowed to beef up infrastructure spending and seek bipartisan support on immigration. Although the annual presidential has become more akin to political theater, it nevertheless divulges key information on the current administration’s priorities.
In his first State of the Union, President Trump applauded the improving economy and took ownership of the surging stock market. The speech touched on infrastructure spending, national security and immigration, highlighting the Trump administration’s focus over the next 12 months.
After a rocky start, the Republican-controlled Congress scored its first major legislative victory in December by delivering a $1.5 trillion tax reform bill. The GOP had previously struck out on healthcare, followed by several failed attempts at replacing the tax code.
Despite an unconventional presidency, Trump avoided controversy on Tuesday and even pledged to work with Democrats on key issues. He also advanced his pledge for more border security, and said such measures would support American workers.
Trump’s proposed infrastructure plan, though not yet announced, is expected to add up to more than $1.5 trillion through a combination of government and private spending.
According to analysts, expectations of an infrastructure boost could be the next leg in the bull market, now in its ninth year.
U.S. stock futures were trading higher following the State of the Union address, with the Dow, S&P 500 and Nasdaq mini contracts all moving in the positive direction.
Focus Shifts to Federal Reserve
Rate-hike jitters helped fuel back-to-back selloffs on Wall Street this week, as investors turned their attention to the Federal Reserve’s first meeting of 2018. The central bank will hand down its rate decision Wednesday afternoon, and while no change is expected, the official statement could provide clues about the future of monetary policy.
This week’s Federal Open Market Committee (FOMC) meeting will be the last chaired by Janet Yellen. Beginning next month, Trump appointee Jerome Powell will take the helm as Fed boss. Powell is expected to continue down the path set forth by Yellen, but could tweak the Federal Reserve’s forward guidance strategy as it relates to interest rates.
Last month, Fed officials predicted three interest rate hikes this year on the back of a stronger economy fueled by President Trump’s tax cuts.
The International Monetary Fund (IMF) recently predicted U.S. GDP growth of 2.5% for the year, unchanged from its previous forecast.
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