As the incoming President of the USA selected his Treasury Secretary, the debate over who it would be got shut down. The man he picked, Scott Bessent, was a partner at Soros Fund and now runs his own successful hedge fund named Key Square. Given his history of macro trades and interest in economic trends over a long period, Trump has given him the mandate to implement his 3-3-3 policy.
The first three require maintaining 3% GDP growth. The latest GDP growth came at 2.8%, but on average, it remains at 3%. This, of course, included large stimulus and some level of moratorium, leading to an increase in consumption. To keep this at the current rate would require large investments, and the administration is not willing to provide more stimulus.
The second 3 is a 3% deficit of GDP. The latest fiscal deficit was 6.3%. According to the Congressional Budget Office (CBO), the deficit would remain at this average for the next 10 years, with debt increasing from $35 trillion to $56 trillion. The incoming administration promises to sell off assets if necessary to reduce debt.
The last 3 is a 3 million bbl/d oil production increase. Currently, the production stands at its highest at 13.3 mn bbl/d, accounting for 20% of global production. This if implemented might start a supply war.
All these policy targets are difficult to achieve in 4 years of administration, given that the current world and local economy is already slowing down. The two major regions in conflict do not help the cause. To achieve a sufficient level of success drastic measures would have to be implemented that might cause high volatility in the next few quarters.
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