Well, the verdict on Donald Trump’s Treasury and Commerce picks is in. Goldman Sachs and Wall Street banks shares are soaring to new heights as investors believe interest rates will rise and there will be lighter deregulation. Higher interest rates will benefit bank but hurt the real economy and real jobs at a time of recession and increase inflationary pressures.
So, my prediction now is that Trump will lose voter over the poor economy at the mid terms. But he may not be impeached because of his recent moves to detach himself from his business as long as it doesn’t go bankrupt in a shrinking economy and with higher interest rates.
He may also not lose that much if he delivers on Obama care and immigration. He could, then, use the second half of his term to make radical changes and renationalize the Federal Reserve.
But for someone who claimed he wanted to drain the swamp and deliver prosperity, to see him pick the very banksters he railed against when he had such a huge mandate for change, will make voters wonder whether they do not need to find another candidate.
Shares of Goldman Sachs Group Inc (GS.N) on Wednesday climbed to their highest levels since the financial crisis, as the bank benefited from a post-U.S. presidential election rally.
Goldman, like other Wall Street firms, has seen its stock soar after the Nov. 8 election, as investors expect banks to see benefits from rising interest rates and lighter regulation under a Donald Trump presidency.
In recent years, bank stocks have been largely thought of as utilities, rather than growth stocks. Post-financial regulations have forced banks to hold large amounts of capital which hurt returns.
But since the election, the KBW Nasdaq Bank Index has risen 11 percent, outpacing the broader Dow, which is up 4 percent.