Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
Financial markets seem convinced that the recent surge in business and consumer confidence in the U.S. economy will soon be reflected in "hard" data, such as GDP growth, business investment, consumption, and wages.Trump's election as U.S. president has triggered a surge in positive economic sentiment, because he pledged that his administration would aggressively pursue the policy trifecta of deregulation, tax cuts and reform, and infrastructure construction.As the Nobel laureate Robert J. Shiller has shown, optimism can evolve into "irrational exuberance," whereby investors take asset valuations to levels that are divorced from economic fundamentals. They may be able to keep those valuations inflated for quite a while, but there is only so far that sentiment can take companies and economies.If improved confidence in the U.S. economy does not translate into stronger hard data, unmet expectations for economic growth and corporate earnings could cause financial-market sentiment to slump, fueling market volatility and driving down asset prices. In such a scenario, the U.S. engine could sputter, causing the entire global economy to suffer, especially if these economic challenges prompt the Trump administration to implement protectionist measures.Indeed, by animating the economy's animal spirits, the Trump administration has laid the groundwork for the private sector to do a lot of the heavy lifting.
Who lost Argentina, again? Reprising a tragedy
Trade disruption symptom of
Central banks might be losing their big bet
FOLLOW THIS ARTICLE