New York University Stern School of Business professor of economics Nouriel Roubini — commonly referred to as "Dr. Doom" — joins Catalysts to outline four key "guardrails" President Trump faces in implementing policy and economic changes.
First is market discipline: Policies that trigger higher inflation would impact bond yields (^TYX, ^TNX, ^FVX), and if this occurs, "the stock market corrects [and] he's going to be punished."
Second is the uncertainty surrounding Federal Reserve policy. Roubini explains that the central bank is waiting to assess the impact of Trump administration policies, and if they prove inflationary, this could prompt rate increases this year.
Third, Roubini expresses concern that some of President Trump's advisors and national security officials "are a bit coo-coo," warning that their policy recommendations could negatively impact the economy and trigger market corrections if implemented.
Finally, he points to Trump's "small majority" in Congress, suggesting this could limit the president's ability to pass legislation.
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This post was written by Angel Smith