Financial Optimism Grows Ahead of Trump’s Second Term

During President Joe Biden’s term, inflation and the economy emerged as significant challenges, reflected in his -19.2% net approval rating on economic issues in the RCP Average. With Donald Trump set to take office in two months, polls indicate Americans have more confidence in the future president to address these issues.

The latest Economist/YouGov poll, conducted after the election Nov. 17-19 with 1,595 U.S. adults, found only 18% of respondents said they are better off financially now than they were a year ago, while 38% said they are worse off. Looking ahead, the numbers reversed: 39% said they expect to be better off financially in a year, while only 18% anticipated being worse off.

The difference was partly partisan. Among Democrats, 28% said they expect to be better off financially in a year, similar to the 31% who said the same about the past year. Among Republicans, only 11% said they improved their financial position over the past year, but 60% predicted improvement in the year ahead.

Financial indicators also suggest optimism for the economy under Trump. Since Nov. 4, the S&P 500 has risen around 250 points, an increase of about 4.2%. Cryptocurrencies have surged as well, with Bitcoin, the most popular cryptocurrency, climbing from $69,000 on Nov. 4 to an all-time peak of $98,400 on Nov. 21.

Despite this optimism, concerns remain about some of Trump’s proposed financial policies. On the idea of imposing a 60% tariff on all goods imported from China, 37% of respondents supported the policy, while 42% opposed it. Support for this measure fell largely along partisan lines, though 28% of independents supported it compared to 42% who opposed it. A broader 10% tariff on most goods imported to the U.S., which Trump has also floated, received 42% support and 39% opposition in the previous Economist poll.

One sweeping policy gaining traction is the proposed Department of Government Efficiency, with Trump announcing last week that the department will be led by Elon Musk and former Republican presidential candidate Vivek Ramaswamy. Its mission is to “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies.” In a Wall Street Journal op-ed, Musk and Ramaswamy stated the department will operate outside the government, advising Trump on “regulatory rescissions, administrative reductions, and cost savings,” with a focus on executive actions within existing laws rather than new legislation.

While the department wasn’t explicitly named in the Economist poll, 65% of respondents supported “creating a commission to audit the federal government and cut government spending,” with only 19% opposed. Even among Democrats, 49% supported the idea, while 33% were opposed.

The most popular of Trump’s proposed economic policies is “ending taxes on tips.” First floated by Trump earlier this year and later endorsed by Vice President Kamala Harris during her campaign, the policy garnered 71% support, with only 17% opposed.