Wall Street, the powerhouse of the global financial sector, has unquestionably been keenly observing the political transitions across the world. One such political episode was the inauguration of Donald Trump as the 45th President of the United States. His entry into the political sphere was marked by a renewed sense of vigor and anticipation, particularly regarding business growth and deal-making. With his business-oriented approach and candid displays of broad economic interest, Wall Street expected that the Trump Presidency would unlock a new era of deal-making.
Unlike conventional Presidents, Trump was not entirely a political figure. He was a business magnate, real estate tycoon, and television personality, who later ascended the realm of politics. Trump’s background reflected a rich tapestry of entrepreneurial endeavors and deal making, all of which were seen as key indicators for a favorable business climate under his administration.
The first wave of optimism from Wall Street came with the promise of deregulation in various sectors. Trump and his team were rooted in the belief that the regulatory chokehold was paralyzing industries and stunting growth. They promised to pare back regulations in key sectors such as energy, finance and healthcare. The intention to revise the Dodd-Frank Act, in particular, attracted the banking sector. The Act, introduced in the aftermath of the 2008 financial crisis, was seen as a barrier to banking operations by many Wall Street moguls. Consequently, the hope for deregulation sparked speculation of increased merger and acquisition activities.
Tax reforms were another key point in Trump’s economic blueprint that Wall Street expected to unlock deal-making. The proposed reduction of corporate tax rates was seen as an incentive for companies to stay in U.S. borders, while simultaneously attracting foreign corporations. The favorable tax climate was anticipated to create an environment conducive to corporate deals, both domestic and international.
Trump’s plan to revitalize domestic sectors also proposed potential growth in deal-making. His call to revamp the aging American infrastructure fueled expectations of increased private-public partnership deals. Trump’s vision to unleash the American energy sector was also likely to spur deals in the energy industry.
More tangibly, Trump’s business acumen and personal knack for negotiation arguably added an edge to his presidency. As a stated admirer of the ‘Art of the Deal’, businessmen and market leaders believed he would negotiate favourable trade deals and unlock new trade territories, all of which could stimulate a flurry of deal-making activity on Wall Street.
In essence, the Trump Presidency was seen by Wall Street as a potential crescendo
