Economists Robert Shiller and Jeremy Siegel may have conflicting outlooks for stock prices. But when it comes to the impact of Donald Trump, they agree. Both said that while they wouldn’t give Trump “credit” for the stock market rise, he has been an important influence.
“I don’t think it’s credit, but I think he is a factor,” Shiller said. “The whole idea of the Trump world that we’re moving into, it appeals to investors. Even people who don’t like Trump, they might still think, ‘hey it’s gonna help the stock market so I’m going to invest in it.'”
Siegel added that Trump’s agenda has an important influence on the market.
“I think pro-business is positive. Less regulation is positive. Hope for tax and corporate tax reform is one of the positives,” Siegel said. “So I would say his election is responsible for certainly a good part of the rally… not all the rally, but certainly a good part of the rally. Now of course if he doesn’t bring about all this, we could have some trouble in the future.”
Trump has touted the stock market strength since his election, with the S&P 500 up 12% since November 8th and the Dow temporarily passing 22,000. For example, Trump tweeted on August 3th, “Business is looking better than ever with business enthusiasm at record levels. Stock Market at an all-time high. That doesn’t just happen!”
Following Trump’s election win, investors made bets on stocks to gain from the administration’s purported economic policies.
The “Trump trade” was coined by market analysts to reflect the president’s pro-growth agenda, including tax reform, reduced regulations (particularly in the financial sector) and more infrastructure spending.
While minimal progress has been made on these agenda items, Shiller and Siegel say he is nonetheless one factor driving the market higher.
For more from Shiller and Siegel:
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Jeremy Siegel and Robert Shiller tell us what’s next for the economy
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Nicole Sinclair is markets correspondent at Yahoo Finance
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