At the beginning of the year, most market strategists were in agreement that interest rates were going to rise in 2017. The reasons varied: some saw inflation climbing, pushing yields higher; others worried about bigger budget deficits; a few blamed the Federal Reserve, which was thought to be planning to raise short-term interest rates two or three times and shrink its balance sheet. Whatever the reason, interest rates were expected to head higher, so seeing the 10-year U.S. Treasury yield here at 2.3% is a surprise.
Donald Trump swept into office on a populist wave. His promise of greater growth for the United States economy resonated with a large part of those disappointed with stagnant wages and a lack of opportunity. He said he would bring manufacturing jobs back and provide better healthcare coverage at a lower cost.
There has rarely been a new presidential administration in the history of the United States that has tried to get so much done in its first ten days as the current one.
The Ten Surprises of 2017 have a generally constructive tone. President Trump campaigned promising significant change to the American people. He raised expectations, and that’s why he won.
Each year I make a practice of reviewing The Ten Surprises of the year that has passed. Last year’s list was on its way to being one of my best and then Donald Trump won the presidential election and everything changed.
Like many others, I was surprised by the results of the election. I guess I was persuaded by the polls that indicated that Hillary Clinton would win, even though the spread had shrunk to something within the margin for error.
When the presidential election is over, investors can focus on what is going on in the world economy and what future investment opportunities are lurking out there.
With all that is happening in the world – the U.S. election, the Brexit vote, various terrorist incidents, speculation about will she or won’t she raise rates at the Fed and other concerns – oil seems to have been pushed down the priority scale of market-influencing issues.