Analysts at BBH explains that the US President Trump’s budget proposal was a single page consisting of less than 250 words and the broad strokes were very much in line with some of the suggestions during the campaign.
“It was very light on details, and this seems to be deterring assessment of the fiscal impact. During the campaign, the Committee for Responsible Federal Budget anticipated it would produce a shortfall of $3 trillion in five years and $7 trillion over 10-years.”
“The budget proposal contained only one revenue increase, and that was the elimination of the deduction for state taxes. This could raise as much as $1.5 trillion for the Federal government and would be the most felt by three states that Trump did not carry (California, New York, and New Jersey). We suggest that it may be most politically realistic to see the proposal as a broad initial negotiating position, not as anything close to its final shape. If we had to characterize the markets’ response, we’d say “unimpressed.”