US: Less tangible Trump stimulus than many have assumed - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that incremental news continues to signal there will be less tangible Trump stimulus than many have assumed.

Key Quotes

“The struggle to craft legislation for a new health care bill that can pass the House, where Republicans enjoy a strong 21 seat majority is just the latest example. Tax reform and infrastructure will potentially run afoul of the same challenging political realities in a few months: even if Senate filibuster risks can be dodged via the 2018 reconciliation bill (needing just a simple majority vote) the Republican party remains divided on infrastructure, border adjusted taxes and gutting government agencies.”

“Political/implementation risk to Trump’s growth agenda along with a nonthreatening Fed have seen yield spreads trend against the USD. Near term risks favour yet more USD weakness.”