That’s my sense of things.

one

I think the US stock market–and all the rest of the world’s major stock markets, for that matter– have pretty much finished the process of digesting (discounting) the most straightforward macroeconomic implications of the change of administration in Washington.

The “big picture” issues I see under Trump’s administration are, in no particular order:

–an effort to shift responsibility for the cost of running the the federal government away from the wealthy and toward ordinary Americans through changes in the Internal Revenue code and a shift from taxing the accumulation of wealth to tariffing consumption

–the decision to shrink the workforce through ICE arrests and deportations

–the apparent desire to lower the cost of servicing the national debt by weakening the dollar and reducing interest rates (a potential reprise of the disastrous policies of the 1970s).

“Joining the Third World” (JTW) is probably a more accurate description of the economics of this program than MAGA–whose social meaning seems to have morphed into something far more sinister than aspiring to be great.

Wall Street has expressed its dismay at this turn of events mostly through a sharp decline in the USD vs. other major currencies over the first few months after the inauguration. Recently, though, the stock market has gone more or less sideways.

two

There’s a lot of recent anecdotal evidence that the US economy is slowing, despite the boost to exports from the dollar’s decline. Numerous firms have remarked that consumers are taking a wait-and-see stance in their discretionary spending–either trading down or postponing purchases. Something that particularly resonates with me–Home Depot is saying that customers haven’t “abandoned” major home improvement projects. But they are postponing the biggest, say, adding a new room to the house and substituting planting a new garden instead.

“Haven’t abandoned” is corporate-speak for “have put off for as far as the eye can see.” The surge in business at the dollar stores and discount clothing chains is another sign that people generally feel that bad times are in the offing.