US President-elect Donald Trump benefited from economic disparities among Americans during his campaign, but these differences threaten to destabilize the country. The “K-shaped” economy, where some prosper while others struggle, has widened under his predecessor and may worsen under his leadership.
The US boasts a strong growth record, but many Americans feel they’re left behind. Low household confidence in Democratic management of the economy contrasts with Trump’s first term’s positive sentiment on economic developments. The incoming president must address these vulnerabilities, particularly financial insecurity affecting the lower income distribution.
Global trends also pose challenges. The US outperforms other economies, causing financial market fluctuations that can harm countries with slower growth. The UK and Eurozone are experiencing stagflationary pressures due to rising bond yields and currency depreciation. This may lead to greater protectionism in the US, undermining competitiveness.
To avoid derailing promising initiatives, Trump should focus on reorienting economic policies to address these disparities and mitigate their impact on the economy. A successful second term depends on tackling these issues and promoting a more inclusive growth model.
Source: https://www.ft.com/content/9fcf7dcb-2fad-4dfd-941e-7d6c94d3090d