Economic Changes and the Election
by Maggie Kulyk, Chicory Wealth CEO and Founder
In the wake of the 2024 election, I want to assure all our clients that we are monitoring – and will continue to monitor – any and all economic changes that may come as a result of the new administration. Clearly, in the short term at least, the “stock market” is on a bit of a sugar high. The market loves nothing more than the promise of tax cuts, and it is likely to be rewarded for its optimism. That, plus the promise of deregulation, will in the short term likely be very good for some sectors of the market and thus drive up prices.
Longer term, we are concerned about the impact of many of the proposed policies on the overall health of the US economy. But at present we’re making no significant changes to the positioning of our model portfolios as we wait and see what the new administration will actually be able to push through. As we all know, campaign promises are one thing, and tangible plans and actions are another. Time will tell, but we will remain “woke,” in all the ways that are required of us.
Meanwhile, the bond market is a bit more wary, as most folks who understand economics realize that some of the suggested policies – if they actually come to fruition – might lead to ongoing and even increased inflation. We’ve been concerned that inflation would remain high, even as the rate of change has come down and the Fed has begun to ease interest rates. Our rationale was and continues to be that wars, an aging population, fewer workers, climate disasters, and no consistent or coherent immigration policy that provides a path to citizenship are all inflationary impulses. For that reason, we have remained cautious as to how we position that portion of our portfolio. We prefer to remain on the “short end of the curve” and take the yield that is given us, while reducing the risk of a reversal of rates that would cause bond prices to drop. So, for now, we will remain vigilant but have no plans to make significant changes to that portion of our models.
Beyond that, we are deeply concerned about what threatens to be a rollback in civil rights and an erosion of our democratic institutions. We partner with many organizations that share these concerns, and we will continue to collaborate with all of them to make our voices heard. Below are the post-election statements from a few that might interest you:
And for those who are experiencing a sense of despair or hopelessness right now, we encourage you to turn to the poets, who can express themselves in ways no news report, chart, or graph ever could. Here are two works we have found inspiring:
- “Updates on the Arc of the Moral Universe,” by Amanda Lehr
- “Here’s how we get through the next four years,” by Milwaukee facilitator Venice Williams
Photo by Alex Plesovskich of Unsplash
