Gluskin Sheff Chief Economist David Rosenberg thinks markets are taking an altogether too rosy view of the Donald Trump presidency. In an interview on BNN, Rosenberg said market participants are being willfully blind of the darker implications of the newly-minted administration.
“The markets have a little bit of some blinders on here, where they’re only pricing in the potential good stuff down the road: tax cuts, capital repatriation, deregulation, but they haven’t been looking at some of the other elements that came out so loud and clear in that inauguration speech, which was a really dark message,” he said.
Rosenberg said Trump’s bevy of executive actions to enact campaign promises means the inauguration speech cannot be waved off as pure political posturing.
“That was really a populist, nationalist, I would say authoritarianism type of [speech], and for a small, open economy like ours that’s so trade-dependent, that’s worrisome,” he said.
For all of Trump’s swift actions, the U.S. President has yet to unveil comprehensive tax reform. Rosenberg said there remain significant questions surrounding any tax-code changes, which he thinks the market is pricing in too optimistically.
“Trade and taxes, even the repeal of Obamacare: there are still lots of uncertainties in terms of how the tax outlook is going to manifest itself,” he said.
“[The markets] want to see the meat on the bone in terms of tax reform.”