President Trump's team is breaking with White House precedent by taking a victory lap after a stock market surge.
After the Dow Jones Industrial Average broke 20,000 points for the first time in its history Wednesday, Trump and his advisers quickly hailed the event while giving the new president credit for the milestone.
“The Trump Effect,” tweeted Kellyanne Conway, one of Trump’s top advisers, linking to a story on the stock market milestone.
“Dow 20,000 = big league. Thank you @POTUS @realDonaldTrump,” tweeted Anthony Scaramucci, a former hedge fund manager and another member of Trumps inner circle.
Trump, normally a prolific tweeter, himself has posted just 16 times from his new @POTUS Twitter account. But he reserved one of those to recognize the new stock market high, tweeting, “Great! #Dow20K.”
Embracing a stock market surge is new territory for a president, as it’s something past administrations have typically shied away from.
Under former President Barack ObamaBarack Hussein ObamaTo Build Back Better, improving Black women's health is a must Rahm Emanuel has earned M since leaving Chicago's city hall: report 60 years after the Peace Corps, service still brings Americans together MORE, the Dow more than doubled in value, but his administration rarely cited gains in the market when promoting its record on the economy.
The main reason for that, longtime Wall Street observers say, is because what goes up will almost always go back down.
“There’s always a temptation for the president to celebrate what Wall Street is applauding,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. “Wise advisers usually restrain them from doing it.”
Wessel noted that during the tech boom of the late 1990s, Treasury Secretary Robert Rubin counseled President Bill ClintonWilliam (Bill) Jefferson ClintonVirginia governor's race enters new phase as early voting begins Business coalition aims to provide jobs to Afghan refugees Biden nominates ex-State Department official as Export-Import Bank leader MORE against any back patting for surging stocks.
“He told the president, don’t take credit for the market going up, because you’re setting yourself up to take the blame when the market goes down,” he said.
But Trump, who built his name in business and has relied heavily on the private sector to stock his administration, is showing no qualms on that front.
For now, there is ample reason for Team Trump to seize on the stock market news.
The nearly 9 percent in Dow gains makes the post-election rally under Trump — also known as the “Trump bump" — are one of the strongest for any incoming president.
And with Trump vowing to reinvigorate the economy by slashing regulations and cutting taxes, there’s ample reason for businesses to at least feel optimistic about the future.
But there are also looming concerns, especially on the trade front.
Investors and economic experts fear Trump’s willingness to drive a hard bargain with other nations could lead to damaging trade wars. The pending crackdown on immigration could take a toll, and the Federal Reserve is expected to raise interest rates, potentially slowing growth.
It’s also possible that the economy simply has less room to grow, as Trump is assuming the White House with an unemployment rate roughly half of what welcomed Obama.
Add to that the fact that the stock market frequently reacts to unforeseen news events, and four years provides ample opportunity for surprises. While Obama saw huge gains in his eight years in office, he also was on hand for some of the biggest collapses the Dow had ever seen.
The standard operating protocol for the Obama administration was to largely ignore the fluctuations of the stock market and instead rely on less volatile economic data to make the case for why its economic policies were working.
By touting stock market gains on his watch, Wessel warned that it could make it trickier for Trump to try and exude confidence if and when the market tanks.
“The time when the words of the president or the Treasury secretary matter most are when the markets are plunging,” he said. “You want to be able to preserve your credibility.”
There are also some additional risks that come with assigning political value to stock market gains. For one, many Americans, including the economically frustrated that many believe were central to Trump’s success, have only modest investments, if any at all.
An April survey from Gallup found that just 52 percent of Americans have money invested in the stock market, and that number has actually fallen over the last several years.
Experts note that a climbing stock market could boost consumer confidence and the overall economy, but hailing higher stock prices in particular could be cold comfort to many Trump voters.