Time stamp it folks.
You had to know it was only a matter of time before Donald Trump took credit for the blistering rally in equities that took the Dow to within a few points of 20K last week.
Indeed, for a megalomaniac it would be a sin not to mention the rally and because the “silent majority” knows even less about bonds than they do about stocks, you can bet Joe Sixpack couldn’t give a shit about the sharp repricing of yields that’s unfolded since the election.
Here’s the tweet:
The world was gloomy before I won – there was no hope. Now the market is up nearly 10% and Christmas spending is over a trillion dollars!
— Donald J. Trump (@realDonaldTrump) December 26, 2016
So two obvious questions come to mind; actually one question and one simple observation.
The question: who gets the blame when stocks fall? Yellen? “Losers”? Hillary? Women who score below a “5” on the Trump-o-meter?
The observation: Trump better hope the effects of fiscal stimulus are indeed supportive of growth and don’t merely flow through to inflation, because the market is depending on equities to buffer the pain from the looming bond bear market and that’s only possible if people continue to believe that the new President’s policies can extend the cycle.
But something tells me Trump neither understands or cares about equity/bond return correlations or the growth/inflation mix.