Trump Tax Plan Uncertainty

The proposals are part of a wide-ranging plan to fire up the world’s top economy, which also includes ramping up infrastructure spending and wiping away business regulations.

“Under the Trump plan, we will have a massive tax cut for businesses and massive tax reform and simplification,” US Treasury Secretary Steven Mnuchin said at the White House.

Trump’s election in November sparked a surge in global markets as traders bet the proposals would fuel US growth.

But the president has already failed to push through a key healthcare reform — despite Republicans controlling Congress — and analysts say he could have trouble pushing through his tax agenda.

“Traders are viewing (the plan) as little more than a road map, rather than the much ballyhooed ‘big announcement’, because the statement did not provide any comprehensive details,” said Stephen Innes, a senior trader at OANDA.

“While the essence of the proposal is reflationary… the argument remains for, and further clarity is required on how, the tax cut’s deficit ramifications will be offset. Fiscal reforms present a real revenue drain amidst disquieting concerns of the current trajectory for the US deficit.”


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes