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January
20
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Week In Review

U.S. Presidency

Donald Trump was sworn in as the 45th President of the United States.

Our Take

There is a great deal of uncertainty regarding the Trump presidency. Markets have been focused on pro-growth promises of reduced regulation, lower taxes and increased infrastructure spending. On the flipside, Trump also seems to support anti-growth isolationist and protectionist policies. With a Republican controlled Congress, change is all but certain. Time will tell how these changes affect the world.


Brexit

UK Prime Minister Theresa May gave a speech laying out her government’s vision for post-Brexit Britain. The key point is that May will seek to maintain free trade between Britain and the EU customs union but will also insist that Britain be free to negotiate its own trade agreements with nations outside of the common market. May is also insisting that Britain be able to control immigration between Britain and the EU. The UK parliament will be allowed to vote on any final Brexit agreement negotiated with the EU. May also insisted that she would walk away from any negotiations over British access to the common market that do not meet her criteria.

Our Take

This speech lays out a vision where Britain gets to keep the popular parts of EU membership while shedding the costs and restrictions on sovereignty. It is unlikely that the EU bureaucracy will agree to such an arrangement. May’s speech sets the stage for a real Brexit. The question will be how much the EU is willing to negotiate and at what point May would walk from negotiations and exit with no deal in place.


Inflation

Consumer prices rose 0.3% in December. Prices rose 2.1% in 2016.

Our Take

Energy costs led consumer prices higher in December. Inflation remains relatively benign, with consumer prices in range of the Fed’s 2% target.


Municipals

New York Governor Andrew Cuomo released his fiscal 2018 budget proposal this week. In the $153 billion budget proposal, Cuomo calls for selling $7.1 billion of bonds, a 131 percent increase over fiscal 2017. Governor Cuomo’s budget plan also includes $14.5 billion in capital spending.

Our Take

Our Take: Lawmakers continue to take advantage of low interest rates by borrowing to pay for infrastructure improvements and finance projects. Even though the New York Governor’s proposed new debt issuance is higher than the amount issued in 2017, the state’s outstanding debt amount is lower now compared to five years ago.