Trump's speech this time essentially sets the tone for future policies and market directions, rather than simply reviewing achievements.
He repeatedly emphasized the transition from a 'mess' to 'the best in history', with the core goal being to strengthen expectations and convey a signal to the market: the upcoming policies will not be conservative, but rather more aggressive. His statements on security, military strength, and border issues are essentially aimed at lowering systemic risk premiums, creating an environment for capital to remain in risk assets.
The fiscal actions are quite direct. Distributing a one-time bonus of $1,776 to 1.45 million military personnel is a high-efficiency liquidity injection that will support consumption and demand in the short term. The $18 trillion investment commitment is more about providing an upper limit for the market's imagination and stabilizing medium to long-term economic expectations.
The most critical information still comes from monetary policy. He clearly stated that a new Federal Reserve Chair would be announced soon and emphasized that the new Chair will advocate for substantial interest rate cuts, which is almost equivalent to confirming to the market that easing expectations are becoming the main line, and the marginal effects of high-interest rate cycles are weakening.
For us, the signal released by this speech is very clear: the policy direction leans towards stimulation, liquidity expectations are improving, and what the market will be trading next is not recession, but how far the prosperity expectations can go. Following policies and capital is much more important than going against the trend.
