The GDP warnings are adding up: Morning Brief

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Red, ugly plans on our platform embody a moment of satisfaction. But economic growth is also on the cutting block.

In recent interviews, President Trump has expressed a rocky, not moving at the stock market, as if his goals of the American economy were more important than Wall Street’s whims. He and his economic advisers have developed a long -term view, recognizing short -term pain through a variety of expressions and metaphors such as “toxins”, “disorder” and “transition”.

But if there is a way to crazy the market, we will not see its fruits for some time. All the time, current measures and expectations for the “real” economy become darker.

Economic teams have reduced the 2025 GDP. Morgan Stanley is now 1.5 % growth in 2025, a decrease from 1.9 %, while Goldman Sachs has decreased from 2.4 % to 1.7 %.

To some extent, the Trump team in America first has a point: Why should a selection of investment bankers and money managers have to dictate the nation’s economic agenda? The stock market, in the worst light, is also a group of chasers in the direction and tannas eagles, and a vortex of uncomfortable desire. (A more comprehensive market reading, taking into account pension accounts gently to ordinary people to the side here.)

But it also expresses something that the threats of bullying or threats can be touched by: If most people actually believe that Trump’s decisions will lead to long -term growth, the stock market will escalate, not down.

If the gross domestic product numbers are increasingly corresponding to the gloomy expectations, the president’s goals may prove that they are very ambitious so that they do not deserve effort.

In the initial stage after the opening, sympathetic views between the two strategies were that in exchange for the negative effects of definitions and loss of jobs in the public sector, the economy will generally benefit from canceling restrictions, low energy prices, and a more clear tax system. But the market is chasing the idea that painful shocks will come first, while the expected benefits may reach a later time.

“The pain deserves the gains on the road … and this is the new narration that comes out of Washington,” Mohamed El -Erian, head of Queen’s College, Cambridge, and former CEO of Pimco, told Yahoo Finance earlier this week.