Stephen Moore, a senior visiting fellow in economics at the Heritage Foundation and former economic advisor to President Donald Trump, has expressed concerns about the potential “catastrophic” impact on markets. He highlights the risks posed by federal budget tax cuts and market volatility, emphasizing that these factors exacerbate an already sensitive fiscal environment.
Moore warned that a decision by Republicans to raise tax rates could trigger a bearish slide in the stock market, calling such a move “catastrophic.” He stressed the importance of maintaining low tax rates, asserting that Republicans should focus on cutting, not increasing them.
Moore noted that President Trump had previously implemented policies leading to a booming market. However, he pointed out that market panic, especially during recent downturns, often prompts people to make costly mistakes, such as selling stocks at low prices.
Recent developments show continued volatility in stocks, despite recent gains. The volatility persists amid a lack of ongoing tariff discussions with China. White House Press Secretary Karoline Leavitt stated that the U.S. remains firm on its stance, requiring China to negotiate a deal with optimism for a resolution.
Furthermore, Republicans and President Trump are advocating for the reauthorization of his 2017 tax cut package. Without action, these taxes may expire, resulting in increased rates for many Americans.
Moore also mentioned discussions about increasing corporate and personal income tax rates. Despite concerns, he believes these issues are being addressed, urging continued attention.
He characterized Donald Trump as one of the most pro-business presidents in modern times, predicting a market revival in the coming months. Moore advised long-term investors to remain in the market, predicting its potential resurgence.
During Trump’s first term, significant economic policies included trade agreements and the largest tax reform package in U.S. history. Moore is confident that similar initiatives in Trump’s second term will yield benefits.
Moore acknowledged ongoing trade disputes might prolong uncertainty but expressed confidence in Trump’s ability to achieve favorable trade deals, forecasting robust market growth over the next few years.
In Trump’s first term, significant stock market gains were recorded, reinforcing Moore’s belief in Trump’s positive impact on investors and companies.
