Trump administration’s $1 trillion infrastructure proposal
The stock market has been buoyed by the recent news of the Trump administration preparing a $1 trillion infrastructure plan. The proposal will mainly cover conventional infrastructure like roads and bridges as well as technology infrastructure like 5G and rural broadband. The majority of the $1 trillion is expected to go towards the former.
The $1 trillion infrastructure proposal is part of the Trump administration’s plan to spur the economy. Additionally, the existing infrastructure funding law is due for renewal on 30th September. The US economy has gone into a recession due to the outbreak of the COVID pandemic and subsequent lockdowns throughout the nation.
There may also be a political angle to the proposal with elections due later in 2020. Both the Democrats and the Republicans have favored some sort of infrastructure stimulus. The Democrats had offered a $500 billion proposal to renew infrastructure over a 5 year period. It remains to be seen whether the Trump administration’s proposal is aligned closely with the one put up by the Democrats.
According to White House spokesman Judd Deere, “Since he took office, President Trump has been serious about a bipartisan infrastructure package that rebuilds our crumbling roads and bridges, invests in future industries, and promotes permitting efficiency.”
The stimulus efforts now seem to be shifting from personal financial assistance to wider growth-boosting moves such as infrastructure spending. These infrastructure measures could very well be announced during the next round of pandemic relief.
The Dow Jones Industrial Average went up 157.62 points on the 15th of June 2020. The Nasdaq Composite rose by 1.4% while the S&P 500 advanced 0.8% on the same day. Infrastructure stocks and telecom stocks may see heightened interest in the light of these developments.