Two months after his surprise election night victory, Donald Trump will be inaugurated as the 45th President of the United States this Friday. We said on election night that, more than anything else, his victory would bring lasting uncertainty and volatility and nothing that has happened over the past two months has changed our view on that. If anything, recent events, including last week’s press conference, have only reinforced it. For better or worse, this is most definitely not business as usual. Aside from the presidential inauguration on Friday, we expect the data releases this week to show that a spike in gasoline prices helped push headline CPI inflation back above 2% in December, while we also anticipate a slightly stronger gain in core consumer prices. A broad-based rebound in industrial production last month should provide further evidence that the manufacturing sector is shaking off its recent malaise. Finally, after the surge in homebuilder confidence following November’s election, housing starts probably picked up in December.
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