Finally
President Trump’s inauguration speech was a lot more president-like than his campaign was president-hopeful-type. But that much was to be expected, even though he did not move beyond the constituency that got him to the presidency, only chose more appropriate words. And, of course, heads of state, financial giants, capital markets – who have held their breaths since Nov9 for this moment of truth – now wait for the verdict. The first signal, as always, comes from the market. And Trump must have noticed now treasures and gold climbed as most investors dumped pre-inauguration trades and sought safe havens.
More tellingly, the dollar dropped. Pundits are already wondering if the rally triggered by Trump’s pro-growth posture has run into early headwinds. The “Buy American, hire American” up front implied that the sobriety expected of the reality check hadn’t really affected the conservatism that may well lead to trade and currency wars. That, if anything at all, is not pro-growth. And Trump, no stranger to the cold calculus of the market, understands that better than most of his eminent predecessors. One the other hand, the Mexican peso suddenly rose, contrary to its record fall through the floor after the election, which shows that the immediate scramble could well be just a lot of confusion, though confusion is something the zero sum reality of market charts rarely factors in.
For Pakistan the implications are different, though in large part they too concern money. The Republicans bulldozed the F16 deal, froze CSF payments, even humiliated Pakistan in the House. But Trump is Republican only in ticket. So only a wild guess can call the immediate future with any semblance of accuracy. Then there’s the security situation and the Afghan endgame to consider, not to mention the future of the Pivot to Asia. The only thing Islamabad can be certain of is that Trump will demand clarity and quantifiable answers. That, sadly, is far from our strong point.