Wall Street Misjudged Trump… Policy Uncertainty Reaches 2008 Financial Crisis Levels

# Economic Policy Uncertainty Rivals 9/11, Financial Crisis, Pandemic Levels The Wall Street Journal (WSJ) reported on the 14th that Wall Street and corporations completely misread President Trump's second term. According to WSJ, those who expected Trump's second term to mirror his first are now facing a shock. Investors who had anticipated a focus on tax cuts and deregulation are finding themselves unsettled by Trump’s aggressive tariff policies. After last year's election, the stock market soared as investors believed President Trump would prioritize economic growth and the stock market, much like his first term. However, he is currently focusing on protectionism and revitalizing the manufacturing sector over short-term market performance. Recently, President Trump announced a shift in his approach, stating he would pursue economic policies from a long-term perspective rather than using the stock market as a benchmark. Wall Street had hoped Trump's economic advisors would moderate his radical tendencies, but reality proved otherwise. Despite the appointments of mainstream economic experts such as Commerce Secretary Howard Lutnick and Treasury Secretary Scott Vescent, President Trump is pushing for more robust protectionism. Since taking office, Trump has imposed tariffs on over $1 trillion worth of imports, with plans to expand this to $1.4 trillion. Trade conflicts with key trading partners like Canada have also intensified. His tax policies deviate from expectations as well. While aiming to extend the GOP's 2017 tax cuts, Trump's emphasis is on reducing taxes for tips, overtime pay, and Social Security benefits rather than on corporate tax cuts to strengthen competitiveness. These measures are perceived as more populist than pro-business. Deregulation efforts are actively underway but are also being used as a tool for political retaliation. There is speculation that President Trump may interfere with the merger between Paramount Global, CBS's parent company, and Skydance Media due to perceived grievances over CBS’s editing of an election interview on "60 Minutes." Additionally, targeted actions have been taken against Perkins Coie, a law firm with Democratic affiliations, by limiting its access to federal buildings and government contracts. WSJ notes, "While companies welcome Trump's return to power, they express concern over the uncertainty of his policies," adding, "Market anxiety is growing due to the likelihood that economic policies are prone to be swayed by the president’s impulsive decisions."