How will the change to a new president in January affect our economy? Our country? The financial markets?
To help us explore these questions and get an inside look at what’s going on in Washington, we have a special guest on today’s podcast.
Greg Valliere has 40 years of experience following Washington issues for institutional and retail investors. He’s widely quoted in the national media on political and current events, federal reserve policy and tax and spending issues. If you’ve tuned into any of the political news recently, you may have seen him on CNBC, Fox Business, CNN, or CBS Radio to name a few. Greg is currently the Chief Political Strategist at Horizon Investments.
Greg Valliere was the keynote speaker at our recent Summer Educational Event and we are excited to share his remarks with you via our podcast and the notes below.
I think we can all agree this presidential campaign has turned into a spectacle that has captivated the nation. Both major political parties have candidates that offer stark contrasts for our nation’s future.
Greg’s remarks are non-partisan in nature and reflect his deep connections to Washington. I think you’ll really enjoy his insider perspective on what is happening…and what may happen come January 2017. Please enjoy!
Watch the Video of Greg Valliere’s Talk
Listen to the Episode
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Five Insights From Greg Valliere
1. There’s a disconnect between how well the economy is doing and the mood of many Americans.
By many measures, the U.S. economy is doing okay. The unemployment rate is below 5.0%. Wages are starting to increase. Gas prices are low. Stock prices are near all-time highs. Yet, Greg said, “I go around the country and tell people this and nobody believes me. I think that’s a reason why both Donald Trump and Bernie Sanders have gotten so much traction with voters who are not persuaded that the economy is in good shape. I just point to surveys that show close to half of all American’s think we’re still in a recession, but the recession ended 7 ½ years ago.” It appears that while the overall economy is okay, there’s a subset of people for whom things are not working out so well.
2. While the economy is doing okay, it should be doing better. Greg said the presidential candidates need to focus more on how they’re going to increase economic growth.
Greg would like to see our country’s GDP grow by 3.0 to 3.5% instead of the 2.0 to 2.5% rate we’ve been experiencing lately. He said, “Stronger growth won’t eliminate the deficit, but it will make it much more manageable for the bond market.” To get this stronger growth, he said we need tax reform, regulatory reform, and perhaps some tax cuts. “There are things that can be done, but why in this election are we not having more people talk about getting the growth rate up is an enduring mystery for me,” said Greg.
3. Greg sees three election scenarios. The first scenario would be a very narrow Hillary Clinton win.
Greg thinks this is the scenario the financial markets could live with the best. It would likely keep Congress divided and not result in massive policy changes. He believes this is currently the most likely scenario.
4. The second scenario is a landslide Hillary Clinton victory.
If Clinton won in a landslide, say, 60/40, the financial markets might worry. Why? Because Congress might flip and if you had Democrats running the executive and legislative branches, they could pass major legislation without Republican support. “If one party controlled everything, I do think the markets would worry about things getting unbalanced. I think the likely scenario is that one party will not control everything,” said Greg.
5. The third scenario is a Donald Trump victory.
Greg said a Trump victory would “bring lots and lots of issues.” He said the markets hate uncertainty and, “Trump would be the mother of all uncertainties if he were elected.” In particular, Greg said Trump could start a trade war with China, could pick a fight with the Federal Reserve, and could enact fiscal policies that add trillions more to our federal deficit. On the plus side, a Trump victory might result in some positive changes to our tax code.
Greg Valliere on politics…
What riles me the most is we as a country have made promises we cannot keep..
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Bill Keen is the founder and CEO of Keen Wealth Advisors, an independent Registered Investment Adviser serving affluent clients preparing for retirement and the host of the Keen On Retirement podcast. Bill brings more than 20 years of financial services experience and holds the CHARTERED RETIREMENT PLANNING COUNSELOR designation. Bill created Keen Wealth Advisors to build one of the country’s most personal and trusted wealth and retirement advisory firms.