Wall Street and Main Street are both doing the Trump dance and that's the subject of the riff. Take a look at some whopping confidence numbers – hot off the press today. Small business confidence registered its largest one-month gain in the 39-year monthly history of the survey, soaring after the election.
Middle-class working folks, who expect their financial situation to be better a year from now, jumped to its highest reading since February 2020 – just before the pandemic hit – according to a New York Fed survey.
On top of that, even big business is starting to do the Trump dance. The Business Roundtable published their quarterly survey today based on responses from CEOs of 156 firms – mostly the largest in the country – and their confidence index jumped to the highest level in two and a half years.
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Six-month expectation of sales, capital spending and employment – all improved. Guess what? Seems like folks are looking forward to lower taxes and regulations. Guaranteed, consumers are hoping for $2 a gallon of gasoline. You can bet that small businesses are anticipating a permanent extension to the 199A 20% deduction for pass-through companies, which make up a huge portion of overall American business and employment.
You can also bet that middle-American working folks will be very happy with tax-free cash tips and tax-free overtime to fatten their wallets.
Seniors would also like a break from the double tax they're now paying on their lifelong earnings. It's all right there in President Donald Trump's campaign platform, and folks are hanging on every word to see what progress he's making to keep his promises. And let's not forget the Trump stock market rally, which might have something to do with a tax cut to 15% for corporations – something that would be very healthy for profits and real wages.
Then there's the Scott Bessent bond market rally, where hopes are high that DOGE brothers, Elon Musk and Vivek Ramaswamy, will do their part in chopping down the size and scope of government – cutting spending, and ending not only regulations, but the regulatory agencies themselves.
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The combination of 3% or better economic growth, a meaningful decline in the budget deficit to 3% of GDP (from 7% currently), and an additional 3 million barrels a day of oil production that will lower energy prices throughout the economy – this is Mr. Bessent's 3-3-3 formula. It's become very popular on Wall Street.
Mr. Trump's pledge to lower taxes and regulations has become very popular on both Wall Street and Main Street. Now, the trick is to get it all done as soon as possible. Promises made, promises kept, Mr. President. That's the riff.
This article is adapted from Larry Kudlow’s opening commentary on the Dec. 10, 2024, edition of "Kudlow."
