Donald Trump's presidency is already having positive affects on the nation's economy, according to one top economist.
Torsten Slok, Deutsche Bank AG's chief international economist, believes Trump's election has pushed an economic recession back nearly five months, Bloomberg reported Friday.
According to Deutsche Bank AG Chief International Economist Torsten Slok, at least one important barometer shows the election of Donald Trump pushed the odds of a recession back an additional five months, to more than two years from now. Interest rates should continue to climb while expansion continues—though once things cool off, that's when the market would expect the Fed to start loosening policy again.
Trump's Electoral College victory, along with a Republican-controlled Congress, has raised expectations that corporate and personal tax cuts are a foregone conclusion—and that enhanced infrastructure spending may even be in the pipeline. Measures of consumer and business confidence have spiked since the election, especially forward-looking indicators that speak to how the American economy will fare over the next 12 months.
Slok wrote a letter to clients on Friday, explaining with a chart how Trump's policies could stave off a sharp economic downturn.
"This is very important for equity, rates, and Forex investors because it shows that the next U.S. recession is more than two years away, and the chart [below] also shows that the election of President Trump delayed the next recession by five months," Slok wrote. "This all points to a continued U.S. expansion, which means higher equities, higher rates, and a higher dollar."
Slok says market expectations are that the Federal Reserve will now be back at zero interest rates in just over two years.
"The current market expectation is that the Fed will be back at zero interest rates in 27 months," Slok wrote. "In April 2016 the expectation was that we would get a recession within 11 months."
The chart Slok referenced can be seen here.
