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The Trump effect has taken over all the dinner party chats at the World Economic Forum in Davos this year — on and off the record.
"What can go wrong?" one Trump insider said somewhat sarcastically to us after a panel on technology.
Loosely defined two days into his second presidency, the Trump effect could be summed up as unbridled levels of excitement by executives on the future of US business that brush aside possible downsides.
Tariffs fears? No problem! They will be offset by explosive US growth. A trade war with Europe? No problem! More stuff will be made in the US at a cheaper price. Deficits, a surging 10-year, and tariff-driven inflation?
No problem! The stock market is at record highs, making people feel wealthier and encouraging them to spend — even if not everyone is invested in the market.
Trump unleashed a historic wave of executive orders and actions on Monday that included many areas of interest to investors and businesses. They include the invocation of a national energy emergency designed to spur domestic energy production, a withdrawal from the Paris Climate Accords, and a regulatory freeze.
Bank executives were exuberant. JPMorgan head of asset and wealth management Mary Callahan Erdoes said his policies are creating a “very pro-business environment,” noting that “animal spirits” are alive and they are hopeful for a lighter regulatory touch that will boost lending and fuel economic growth.
JPMorgan has set up a "war room" to comb through all the new policies issued by the president on his first day in office.
"They have been up all night and are working on it," Erdoes responded Tuesday morning on how JPMorgan views the impact of Trump's policies on the economy.
Bank of America (BAC) CEO Brian Moynihan also joined in on the Trump effect optimism, striking an upbeat note in a Yahoo Finance interview (video above) on financial regulation and crypto — a mood shift for Moynihan from the last time we talked at Davos 2022.
Crypto, as much as anything, has played a front-and-center role so far at Davos, as business leaders look to take advantage of whatever policies the most crypto-friendly president ever will enact.
"He really wants to be the first bitcoin president," said Coinbase (COIN) said CEO Brian Armstrong, who's attending Davos for the first time — which says a lot about the current crypto moment. Armstrong met with Trump before and after the election to advocate for the crypto industry, including a strategic reserve.
So far, Trump has appointed crypto advocate Paul Atkins to lead the SEC and venture capitalist and former PayPal (PYPL) executive David Sacks as an AI and crypto czar — good signs, the industry thinks.