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Trump Fiscal Policy Sparks Applause And Alarm on Wall Street

Published 22/02/2018, 01:47 am
Updated 22/02/2018, 01:47 am
© Reuters.

© Reuters.

Investing.com - What's good for the stock market may not be good for the economy.
Two Wall Street firms have weighed in on the Trump administration's fiscal initiatives and come to very different conclusions.
BlackRock strategists think the fiscal stimulus of the massive tax cut package is "supercharging U.S. earnings growth expectations," which makes the firm bullish on stocks.
BlackRock says that companies are raising earnings expectations at a record rate and that typically bodes well for the stock market, which recently experienced an abrupt correction in its nine-year bull run.
Goldman Sachs (NYSE:GS), however, is concerned that massive deficit spending has entered  "uncharted territory" and will lead to the worst fiscal position in decades, which will inevitably hurt economic growth,
Goldman is also downplaying the positive impact of the tax cut package on the economy, saying that it will increase growth by 0.7% in 2018 and 0.6% in 2019 and "likely come to an end after that."

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