The Macro Report | April 2017

Pillars of global growth

The Trump trade — the idea that President Trump’s economic agenda would push up the U.S. nominal growth rate — led to a few months in which the risk appetite line for the United States alone was practically vertical. Long Treasuries dropped sharply, and U.S. equities rose strongly. But more recently, this trade appears to have fallen out of favor as investors reconsider the domestic policy outlook.

As the Trump trade fades, the global reflation trade has begun to take over. In this story of widespread economic improvement, we see the United States simply continuing on its prior economic trajectory of slow and steady growth. This month, in addition to the United States, we take a closer look at Europe and Japan, two other sources and beneficiaries of global economic strength.

More from Macro Report

As the domestic U.S. policy outlook dims, markets take their cue from more substantive signs of change.