It is 10:09 pm EST and the USD/JPY is trading at 150.4809 and the AUD/USD is at 0.6502. Former U.S. president Donald J. Trump got a victory in the U.S. Supreme Court where the court held that the state of Colorado did not have the authority to remove a federal candidate from their primary election ballot. The court opined that it is up to Congress via legislation to disqualify Mr Trump under the 14th Amendment from holding office as a result of leading or participating in an insurrection.
I suspect that the Democrats will have to start focusing their campaign strategy on winning Congressional seats as well as making an argument for why incumbent president Joe Biden should serve another term as U.S. president. Should the Democrats be forced to go the old-fashioned route and win the campaign on the ground versus in a courtroom, they will either have to turn incumbent Republican seats into Democratic seats or pull Republicans over to the other side of the aisle in a quest to obtain the two-thirds vote necessary in each chamber to disqualify Mr Trump should the Man from Queens become President-Elect.
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Recently, the mainstream financial press has been speculating that Mr Trump will continue an “America First” campaign and impose a universal tariff on Asia, Europe, and Mexico. A number of analysts expect such a tariff will have an expansive impact on the economy particularly in the cost of the U.S. dollar. Commenters writing for Bloomberg expect an America First policy to attract more foreign currency to America’s shores in exchange for U.S. currency.
The bet on this growth is also due to the expectation that the globalization model will transition somewhat to a domestic model. As interest rates climb to attract investment dollars, the Fed, in my opinion, may be less incentivized to cut rates.
I like any other depositor am looking for higher yields so I can accumulate more cash at a faster rate. For that reason, I am not too keen on rate cuts.
Mr Biden delivers his State of the Union address this Thursday. He has been touting his Bidenomics plan for months where infrastructure spending is at the heart of his plan. Philosophy wise, his infrastructure focus is a carryover from the approach of former president Trump where Mr Trump hung his hat on bringing back American infrastructure.
Alton Drew
4 March 2024
For more of my take on the American political economy, purchase my book at amazon.com/author/altondrew.
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Alton Drew 