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May 25, 2017 Article 1 min read
While the overall direction of the administration’s pro-growth policy remains relatively clear, what’s changed is the political reality. It will be hard for the administration to push its proposed reforms through with the sharpening focus on the investigation and its increasingly bipartisan support.

Sunset on the water

Executive summary

  • In recent weeks, a number of headlines and allegations have unfolded within the political arena and appear to have temporarily shifted focus away from President Trump’s policy agenda.
  • While the overall direction of the administration’s pro-growth policy remains relatively clear, what’s changed is the political reality. It will be hard for the administration to push its proposed reforms through with the sharpening focus on the investigation and its increasingly bipartisan support.
  • Early hope for changes by the end of 2017 is giving way to an increasing probability that any significant changes are likely to be pushed back to 2018. That alone could create additional challenges, as Democrats are unlikely to be motivated to support the president’s agenda in the months leading up to mid-term elections.
  • Despite ongoing investigations, increasing geopolitical tensions, and likely delays in policy implementation, investors still appear to be largely unfazed. Equity market volatility remains very low and stocks have continued their upward trend, supported by a broadly positive economic backdrop. Still, the potential for increased volatility exists.
  • Most measures of optimism remain high today, but as the window to get things done in Washington narrows and the potential benefit of economic stimulus is delayed, it's too soon to tell what the impact will be. The new administration and Congress may need to walk the political tightrope to justify recent optimism.

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