Institutions: Trump's choice of extreme policies may lead to a pullback of more than 15% in the stock market

AMP Chief Economist Shane Oliver said that due to excessive valuation and more extreme policies taken by Trump in trade and government spending, the US stock market is likely to see a pullback of more than 15% this year. In 2016, Oliver expressed concern that Trump would let ‘crazies’ join his team. Overall, Trump did not do this, which led to continuous changes in the team; previously, some ‘sensible people’ in the team prevented more extreme policies, but this time, as Trump appointed his loyal supporters, there seemed to be fewer ‘wise men’ in the team. From the perspective of rationalist economics, there are many rational aspects in Trump’s policy agenda, such as tax cuts, downsizing the government, and easing regulation. However, it seems that Trump has taken many extreme policy measures, seemingly causing the situation to get out of control.