The Wall Street Journal Offers Reasons to Be Bullish
With President Trump pushing stimulus, the Journal expects economic expansion in 2026. It also suggests there could be repercussions down the road.
Good morning!
Here are today’s highlights:
Gen Z is approaching starting salary offers differently than previous generations did.
It took Josh Patrick decades to learn to stop dwelling on past failures and future fantasies.
In Los Angeles, people are lining up to pay $1,500 for dinner at a pop-up restaurant.
China just announced the largest trade surplus ever recorded by a country.
THE ECONOMY
The Wall Street Journal reports that President Trump is dialing up the stimulus: “Most years, presidents don’t have much impact on the economy; it is just too big and complicated. This year won’t be like most years. President Trump is taking unprecedented steps to run the economy hot, and there is an excellent chance he’ll succeed. Washington has three big levers that affect growth: fiscal policy (taxes and spending), monetary policy (interest rates), and credit policy (the ease of borrowing). Historically, they were not coordinated: Fiscal policy followed the Congressional cycle, monetary policy was set by an independent Federal Reserve, and credit policy reflected often random decisions by regulators.”
“This year, all three are dialed toward stimulus, reflecting a single-minded focus by Trump and Congressional Republicans on faster economic growth. They hope that will deliver victory in the November midterm elections. In the process, they are compromising other goals: taming debt, Fed independence, and long-term financial stability. The consequences of that come later.”
“The first reason to be bullish on 2026 is that 2025 was remarkably good (even if many Americans disagree). Gross domestic product adjusted for inflation probably grew around 2.5 percent, in line with the solid pace of the previous two years. The main drivers were investment in artificial intelligence and data centers, plus consumer spending boosted by a strong stock market. This didn’t come by using up spare capacity; the unemployment rate actually edged up. So the baseline for growth in 2026 should be well above 2 percent.”
“Now recall that last year’s performance came despite restrictive fiscal policy. Trump’s tariffs raised roughly $200 billion, most of it paid by American businesses and households. This year, average tariffs aren’t going up and might go down if the Supreme Court rules that some were imposed illegally. Meanwhile, the tax-and-spending bill Trump signed into law in July delivers new or expanded tax deductions, in particular for state and local taxes, overtime, tips, and seniors.” READ MORE
