Newman: The old Trump economy isn't coming back

Published On Sep 10, 2024, 4:58 PM

The economic conditions during Donald Trump's first term (2017-2021) are remembered fondly by many voters as a potential factor in the upcoming 2024 election. However, forecasts suggest that if Trump were to win a second term, the economy might not rebound to its previous state due to current inflationary pressures, potential tariffs, and high oil prices. A Goldman Sachs report estimates a potential economic contraction during Trump's first year if he implements his proposed policies. Comparatively, Vice President Kamala Harris's policies are projected to modestly boost GDP growth. Overall, while Trump's presidency saw some economic success, it occurred during a recovery phase that may not be replicated, especially in a post-COVID economy facing new challenges.

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Given the forecast of economic contraction during a potential Trump administration, coupled with rising interest rates and persistent inflation, the stock market may react negatively to his policies. In particular, sectors sensitive to economic growth, like consumer discretionary and technology, could face headwinds.

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