Trump ignites economic turbulence with budget drama

The markets are experiencing increasingly uncertain times as the legacy of a stable economy comes into a new light for President-designate Donald Trump. The Dow Jones closed almost unchanged on Thursday after ten days of losses. The Federal Reserve currently sees inflation persistently elevated and is cautious about further rate cuts planned for the coming year. A significant factor of uncertainty: Trump shattered a bipartisan budget agreement on Wednesday, which could mean that the government might shut down starting at midnight on Saturday. A new compromise proposal that Trump negotiated with Republicans, which is rejected by Democrats and President Joe Biden, could not gain the necessary approval in the House of Representatives. Additionally, Trump is threatening tariff increases, which the Congressional Budget Office says would raise prices and harm growth without generating enough revenue for his planned tax cuts. Trump's renewed bid to lead the White House could test the markets again, as he plans to score with a mix of uncertainty and dramatic appearances. Karoline Leavitt, Trump's spokeswoman during the transition, already announced that the prospective president plans to present the largest deregulation agenda in history on the first day. The goal: tax cuts and accelerated approval of drilling and fracking to lower energy costs and inflation. In recent days, Trump's actions have indicated that economic growth during his first term was often accompanied by turmoil. Whether voters are ready again for a scenario full of blame and uncertainties remains to be seen. Trump took to social media to demand resistance against raising the debt ceiling as a condition for short-term government funding. His friend and advisor Elon Musk also criticized the bipartisan package intended to keep the government functioning until March 2014. The last partial government shutdown in 2018 reduced economic growth by three billion dollars according to the CBO, a small but symbolic amount.