How the stock market could be last guardrails to corral Trump’s wildest whims

Donald Trump has so far chosen only the most loyal supporters to join his cabinet, signaling that he intends to surround himself with officials who will carry out his agenda without question.

But there is one force that could keep some of his plans at bay — the stock market.

“I don’t see Congress or the courts limiting the president’s authority. Ultimately, the only entity that has real power over the president’s thinking about his agenda is the stock market,” Isaac Boltansky, director of policy research at BTIG, told CNN.

During his first administration, Trump obsessed over the stock market and regularly posted on Twitter — now Elon Musk’s X — updates about how it was faring. The approach is not one that Trump’s predecessors adopted in office.

“Stock Market hit another all-time high yesterday — despite the Russian hoax story,” Trump tweeted in July 2017. “Stock Market hits new Record High. Confidence and enthusiasm abound. More great numbers coming out,” he posted later that year.

“President-elect Trump is the most pro-stock market president we have had in our history,” Jeremy Siegel, a finance professor at the Wharton School of the University of Pennsylvania, told CNBC.  “He measured his success in his first term by how well the stock market did.”

So a downturn in the market, might get Trump to think twice about policies if he uses its performance as a barometer for his political success.

After Trump was reelected earlier this month, global stock markets enjoyed a boost while the US dollar surged. Trump was “euphoric” over the news, sources reportedly told CNN’s Kayla Tausche.

But some of his policy ideas and moves could trigger “a market meltdown” and potentially give Trump second thoughts, according to experts.

On the campaign trail, Trump proposed adding a tariff of 10 to 20 percent on all imports — and a 60 to 100 percent tariff on imports from China specifically. And Trump has suggested he could intervene with the Federal Reserve if he pushes out chair James Powell.

“I was threatening to terminate him, there was a question as to whether or not you could,” Trump said at the Economic Club of Chicago last month. Powell said he would not resign if Trump asked him to, nor would he have the authority to push him out.

“Donald Trump cares about independent validators. And the biggest independent validator of his success is the market. It’s a daily voting mechanism,” Ed Mills, Washington policy analyst at Raymond James told the network. “It serves as a potential binding restraint to aggressive policies.”

But not all experts are convinced. Jeffrey Sonnenfeld, founder and president of the Yale Chief Executive Leadership Institute, told CNN that Trump is unlikely to listen to the concerns of investors.

“There is zero chance that he will take personally any negative feedback from the stock market,” Sonnenfeld told the network. “If anything is negative, the attribution is to anything but him. He’ll blame Democrats, the drug companies, the tech companies – anybody. It will never be his fault.”

Siegel added: “It seems to me very unlikely he’s going to implement policies that are going to be bad for the stock market.”