President-Elect Donald Trump Faces Many Economic Risks Once Inaugurated

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As President-elect Donald Trump prepares for his inauguration on January 20, 2017, the rest of the country prepares for his administration, and what it might mean for the economy.

Wall Street and the entire stock market industry are eager for a Trump presidency, thanks to the planned deregulating, promised building of infrastructure, expected massive tax cuts, and increased defense spending. All these plans will most likely provide a sharp boost to Wall Street, but what will that mean to the economy?

According to CNBC, although Trump campaigned with extreme bravado and confidence, his administration has plenty to be worried about and faces many potential risks that could upend the economy in a negative way.

Newt Gingrich, former House Speaker and avid Trump supporter, thinks it would be wise for Congress to fully exempt Trump from what is perhaps the biggest risk to the billionaire President-elect: any conflict of interest rules. The “Emoluments Clause,” to which Gingrich is referring, prohibits any government official — especially the President — from accepting gifts from any foreign government that would compromise his oath to keep the good of the American people before any other interests, including his own.

Another risk that the Trump administration faces is problems with regulating advisory firms across the country. The U.S. Securities and Exchange Commission (SEC) will undoubtedly be taking a new direction once Trump is President; with Chairwoman Mary Jo White, enforcement director Andrew Ceresney, and various others stepping down, there will be plenty of vacant seats to fill.

There have been numerous reports that the SEC exam process, which has seen a 27% increase since 2013, has already become much stricter, and one can only assume how much more strict a Trump administration will be.

“The aggressive policy of the SEC is unlike anything I have ever seen in 30 years of doing this,” said Tom Giachetti, chairman of the securities practice group at Stark and Stark. “Even the letters to firms are accusatory and all the while the threat of enforcement is held over them.”

Investment News reports that lawyers and advisers who’ve recently participated in the SEC exam process described the event as both “nerve-wracking” and “gruesome.”

As of right now, the financial markets are optimistic about a Trump presidency, but they have certainly been wrong before. Only time will tell how everything will play out, but it’ll surely be interesting to follow along.

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