U.S. President Donald Trump's first speech to Congress on Tuesday night was wide-ranging in coverage, nationalistic in tone and presidential in delivery.
The president repeated many of the themes he advocated during the campaign and has reiterated since the Nov. 8th election. He declared the opening of "a new chapter of American greatness," the "renewal of the American spirit," and the country's readiness to lead globally but only "by putting its own citizens first."
In his comments on the economy, he set out his main areas of policy focus but left for later the details of what specific measures he wants to take, how they will be funded (where needed), and when they will be implemented.
Characterizing the country's economic condition as worrisome after years of deindustrialization, eroding competitiveness, rising inequality and too many Americans lacking jobs, he stated that his administration was developing an "historic tax reform" that, along with a "big tax cut," would enable U.S. companies to compete better at home and abroad.
While on the topic of global competition, he lamented "the exports of U.S. jobs and wealth" to other countries. He warned them that the U.S. would no longer accept an uneven playing field, especially when it comes to import tariffs and surcharges. "Free trade also has to be fair trade," is how he put it.
Noting that "the time has come for a new program of national rebuilding," he reiterated his intention to embark on an ambitious infrastructure plan that emphasizes "buy American and hire American." While noting that this would be done through both partnerships and fiscal channels in the context of a budget that would also make more room for military spending, he stopped short of commenting on the balance of deficit financing and new revenues. Also, citing the example of the coal industry, Trump repeated his commitment to the further removal of what he regards as excessive regulation.
Many of these themes have already been embraced by equity markets that have embarked on a record-setting run higher. As such, investors will welcome Mr. Trump's restatement of his pro-growth agenda. But those hoping for clarity on the "how" and "when" of his execution must wait. Their rollout was not on Tuesday night's agenda. The question now is how patient markets will remain.
Mohamed A. El-Erian is a Bloomberg View columnist. He is the chief economic adviser at Allianz SE and chairman of the President's Global Development Council, and he was chief executive and co-chief investment officer of Pimco. His books include "The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse."