Tags: Trump Administration | Donald Trump | Goldman Sachs | Donald Trump | Political | Economic Risks

Goldman Sachs: US Political, Economic Risks Mounting Against Trump

Goldman Sachs: US Political, Economic Risks Mounting Against Trump

(Getty/David Angerer)

By    |   Sunday, 05 February 2017 04:59 PM

Goldman Sachs Group Inc. has warned that a tidal wave of U.S. political and economic risks are building against President Donald Trump's agenda, little more than two weeks into his administration.

The policy halo effect that provided ballast to the stock market and fueled investor optimism is already being dimmed by political realities, CNBC reported Goldman Sachs as warning. Such a backlash may have negative implications for economic growth, CNBC.com explained.

“In a note to clients on Friday, the investment bank noted President Donald Trump's agenda was already running into bipartisan political resistance, with doubts growing about potential tax reform and a repeal of the Affordable Care Act, among other marquee Trump administration initiatives,” CNBC reported.

Just two weeks into his tenure, "risks are less positively tilted than they appeared shortly after the election," Goldman wrote. Growing resistance to Trump's executive orders on immigration and financial reform has galvanized opposition while dividing members of the president's own Republican Party, CNBC explained.

"While bipartisan cooperation looked possible on some issues following the election, the political environment appears to be as polarized as ever, suggesting that issues that require bipartisan support may be difficult to address," the bank added.

The balance of risks "are less positively tilted than they appeared shortly after the election," Goldman said, which may blunt the force of future growth.

Such criticism of Trump's policies so early into his presidency could be shocking, but it is even more ironic in that is comes from the same Wall Street bank Trump has tapped to fill at least five top jobs in his administration.

The move to pull from Goldman's talent pool also comes after Trump derided Wall Street and singled out the firm as a symbol of greed during his campaign.

Highlighting Trump's cherry-picking of Goldman veterans:

  • Steven Mnuchin, a former partner at the bank, has been picked to be Treasury secretary.
  • Goldman Sachs President Gary Cohn has been tapped for a top White House economic post.
  • Stephen Bannon, another alumnus of the firm, has been named chief strategist.
  • Goldman partner Dina Powell has been selected to become a White House economic adviser.
  • Jay Clayton, a Wall Street lawyer picked to head the Security and Exchange Commission, represented Goldman in private practice.

“The Goldman and Wall Street takeover of government raises incredibly serious concerns,” Dennis Kelleher of Better Markets, which backs tougher financial regulation, told the Financial Times.

“They’re not evil people. The problem is their whole life — their thinking and net worth and measure of success — is invested in the mentality that what’s good for Wall Street is good for America.”

However, on the presidential campaign trail, Trump accused primary rival Ted Cruz of being controlled by Goldman Sachs because his wife, Heidi, previously worked for the Wall Street giant. He slammed Hillary Clinton for receiving speaking fees from the bank.

And while many of his campaign vows have yet to be fulfilled into presidential accomplishments, Trump will be a demanding leader who applies the best of his negotiating skills to push for U.S. growth, bestselling author David Horowitz told TheStreet.com.

Trump won’t be an ideological purist like Republicans who support free trade but don't fight for fair trade, Horowitz said.

“If you just say, ‘well we're for free trade and we're not going to look at the deals that we make’ -- that's not a good idea,” he said. “We've had an anti-business president now for eight years who doesn't take a hard-nosed attitude towards these deals. Trump is going to get better deals for us, which is still free trade.”

Horowitz's new book, "The Big Agenda: President Trump's Plan to Save America," reveals Trump's "first 100 days strategy" to roll back Obama's legislative and executive record.

Horowitz's new book is the first book about the Trump presidency and has soared to the top of the Amazon bestseller charts, becoming the No.1-selling book on the web. Trump will also lead the way in making infrastructure spending to boost the U.S. economy, Horowitz said.

“If the economy grows as it will under Trump, there's going to be a lot more money to spend,” he said.

"Big Agenda: President Trump's Plan to Save America" is available at bookstores everywhere – or get your copy on Amazon – Click Here Now

However, fellow Newsmax Finance Insider Hans Parisis contends that the Federal Reserve seemingly appear to doubt Trump's tactics. The nation's central bank actually sidestepped many potential economic landmines in its first statement of the Trump presidency, Parisis wrote in a recent blog.

Parisis recently noted that the statement from the FOMC did not go into any of the potential controversies that may plague the Fed over the coming months:

  • The balance between quantitative and monetary tightening;
  • The necessity of offsetting any regulatory easing with quantitative and monetary tightening;
  • The necessity of countering any fiscal easing with policy tightening and how to handle the inflation implications of the muted Trump import tax on consumers by tariffs.

(Newsmax wire services, Reuters and Bloomberg contributed to this report). 

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Goldman Sachs has warned that a tidal wave of U.S. political and economic risks are building against President Donald Trump's agenda, little more than two weeks into his administration.
Goldman Sachs, Donald Trump, Political, Economic Risks
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2017-59-05
Sunday, 05 February 2017 04:59 PM
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