Wall Street's View on Trump's Second Term Policies
While President-elect Donald Trump has promised a significant crackdown on immigration, including the deportation of millions of undocumented individuals, Wall Street doesn't anticipate the reality will match the campaign rhetoric.
A Goldman Sachs survey revealed that only 6% of investors expect net immigration to turn negative under Trump's second term. This suggests that despite the promised crackdown, more people will enter the United States than are deported. This aligns with concerns from business owners who fear widespread deportations could lead to worker shortages and higher consumer prices.
The survey also highlights the potential limitations of Trump's executive actions on immigration. While he has some authority in this area, these orders lack the scope and permanence of legislation. Additionally, the narrow Republican margins in the House and Senate could make legislating on a contentious issue like immigration challenging.
Similarly, investors are skeptical about Elon Musk's promise to drastically reduce government spending through the Department of Government Efficiency (DOGE). Only 10% of investors believe DOGE will be able to cut spending by more than $400 billion annually. Experts have pointed out the difficulty of achieving such significant cuts without touching entitlement programs, defense spending, or interest payments.
Despite the skepticism, some business leaders remain optimistic about Musk's potential to revolutionize government. Salesforce CEO Marc Benioff, for example, sees DOGE as an opportunity for significant savings and a more efficient system.
Overall, Wall Street appears to be taking a cautious approach to Trump's second term policies. While investors anticipate some changes, they don't expect them to be as dramatic as the campaign promises suggest.