Por Isaac Cohen*
The Dow Jones Industrial average for the first time, last week, soared past the 21,000 mark, after reaching 20,000 in January. Since President Donald Trump took office, on January 20, stocks have increased 5 percent. Investors are confident that Republican control of the legislature and the White House will lead to the approval of campaign promises on lower taxes for corporations, increased expenditure in defense and infrastructure, with less regulation.
Thanks in part to the accommodative monetary policy practiced by the Federal Reserve, after the end of the Great Recession the stock market has rallied since March 2009. According to The New York Times, this makes the current expansion the second longest since 1928. In terms of strength, it is the third most vigorous with an increase of 250 percent, after 267 percent in 1949-1956 and 582 percent in 1987-2000.
However, some skepticism about how long the stock market rally may last has started to emerge, because of disagreements between the White House and the Congress on infrastructure spending, the reform of the Affordable Care Act and even on military expenditure. The signal may come very soon, since central bank officials said an interest rate increase may be decided at next week’s Open Market Committee meeting.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC Washington.