Economics, Videos

Shiller: A President Trump Reelection Win Would Boost Stocks

Yale University economics professor Robert Shiller suggests a President Trump reelection will prolong the bull market.

President Trump reelection

Robert Shiller: A President Trump reelection win would help boost stock prices and delay a recession

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Transcript

Welcome to trading. I'm Courtney Reagan. A new Goldman Sachs report suggests President Trump has a quote narrow advantage in the 2020 election if he wins. Yale University's Robert Shiller suggests Wall Street will viewed favorably. Professor Shiller thank you for joining us here today. Of course the Nobel Prize winner in economics. What kind of effect do you think that President Trump win could have on the stock market when we're looking at 2020 and beyond.

Well it's very clear that Trump is a pro business candidate. It also seems likely that when Jerome Powell's term as Fed chairman expires he'll bring someone in that he controls more and brings someone who. Will stimulate the economy without worrying. That's another thing. It's also that Trump is a model for extravagant living and big spending all these things are boosting of the stock market.

Do you think that Jerome Powell should be replaced when the opportunity arises. Do you feel like someone else could be better suited for that position. Jerome Powell is a real professional.

Sensible. He's not showcasing grandstanding. I think he's he's he's great in the job. I'd reappoint him. I mean you could find someone else. I suppose. But the recent nominees that Trump has suggested suggests that he would politicize the Federal Reserve take it away from the professionals and put it in the hands of his cronies.

Well of course the Federal Reserve is supposed to be independent of all of those things but we know that the president has very much tried to do his best I suppose to sway Jerome Powell to not raise those rates. Do you think that there is a chance that the Fed will raise rates this year or do you think we're off of that cycle for at least the relatively near term.

There's definitely a chance that they'll raise rates again this year. As much as said so and you look at the dot plots they disagree. There are people. And the other thing to bear in mind is that. Predicting economic forecasting is not an exact science. And things could come up that would necessitate raising rates again.

That is true of course and we have seen a very strong both economy and stock market. A stock market even when we've seen these small dips down I mean pretty quick to rebound back around. We're very close to hitting those new highs or surpassing them once again. What do you see is the forecast for the stock market say again in the near term next several months and also the economy.

Well it's the question of how people look back at the recent correction. We had one early 2018 and another one that ended on Christmas Eve 2018 and we rebounded from those so logically people think maybe they could equally well think these things don't bother me. On the other hand there's another narrative that says that these things are precursors to a bigger event. So I can't predict how they'll react. We're past the days where we felt very secure. We had very low volatility for a while. We're now in a period where we've been shaken. We're pulling ourselves together and we'll have to see where it goes from here.

That's true I suppose things aren't as certain as maybe they used to be because we do have a very different political environment than we've been used to. But the stock market has been relatively resistant to staying low when you have had those sell offs have just moved right back higher. Thank you very much Professor for joining us today. Appreciate your time and thank you for watching trading nation. I'm Courtney Reagan. We'll see you next time.