The first three parts of this series (one, two and three) considered US President Donald Trump’s foreign policies, his approach to domestic government agencies, and his handling of the domestic economy. The main arguments made were that, leaving aside bursts of military action paired with peacemaking, President Trump’s foreign policy was propelled by a desire to reverse a perceived Western civilizational decline caused by “wokeness” plus non-Western immigration. On the economic side, it was propelled by a desire to re-balance trade with countries seen as having taken advantage of the US. (“We were ripped off by almost every country in the world,” Trump said in his 20 Feb. press conference.) The president’s policy toward domestic government was dominated again by a desire to combat “wokeness” as well as to shrink government generally while also strengthening the federal government’s position relative to that of states and localities. In terms of wokeness, there was meant to be a type of re-balancing given that, as the president said, “white people” had been “very badly treated.” On domestic political economy, the series argued that the president’s tariff policies and negotiations for inward investment did not have the effects his opponents expected (economic decline, rampant inflation), but they also did not have the effects the president had promised (non-AI manufacturing investment, job creation, deficit reduction). This final post looks at some implications for investors.
The US Supreme Court’s 6-3 decision on 20 February was consistent with SIG’s analysis over the past year that the real crisis in the United States has been a constitutional one. Trump appointee Neil Gorsuch wrote in his concurrence with the majority, “Americans fought the Revolution in no small part because they believed that only their elected representatives (not the King, not even Parliament) possessed authority to tax them. The framers gave Congress alone ‘access to the pockets of the people.’” The president, in reaction, offered a nearly opposite interpretation, citing Justice Kavanagh’s dissenting view that “the decision might not substantially constrain a president’s ability to order tariffs going forward.” So there is now an open constitutional rift on the US Supreme Court. The conflict will be played out between the White House and Congress.
President Trump argued that, because he has tariff powers under authorities other than those considered in the Supreme Court decision, the policy situation on tariffs will now stabilize. Businesses and investors would therefore be able to invest and grow with confidence. This happy outcome seems unlikely. The president’s own initial reaction to the judgment — to immediately impose a new 10% global tariff under a different authority — does not suggest a reasoned calm. His highly personal attacks on the judges who ruled against him, not to mention his predecessors as president (“we had some real dummies”), do not cast oil on the waters. But beyond that, the tariff issue, for months now, has been that rare topic on which a small but significant number of Republicans in Congress have been willing to diverge from the president. Meanwhile most indicators point to a weakened president, whether in polls or economic data. Even the president’s core support among white Protestant evangelicals — itself a shrinking group in the past several years — has gone down, while backing for his policies among non-evangelical white Protestants has dropped from 46% to 33% over the course of this presidency.
Investors should therefore expect considerable turbulence in the remaining ten months of 2026. An embattled President Trump who is losing electoral power might not go quietly. At the same time, perhaps the most remarkable thing about the US economy in 2025 was that it chugged along in a somewhat dull but not unhappy fashion despite the tremendous political noise all around. The signature structural problem, as discussed in the previous post, was the national debt, which could get considerably worse if much tariff income ($134 billion last year) drops out. The president believes lowered interest rates under a new Fed chair will solve the problem. It would certainly help the housing sector, but it would not get at the problem of low non-AI-related capital expenditure and related slow job creation.
In SIG’s view the most likely scenario is continued low-to-moderate growth rooted in consumption as we enter the sixth year of expansion. The population will continue to age, particularly with lower immigration, meaning that sectors like health care and entertainment will continue to provide growth as they did in 2026. AI applications that compensate for a shrinking workforce will prosper. Given an aging housing stock, pent-up demand, and a lack of workers, any businesses that can exploit the need for renovation and updating will also thrive. The automobile sector is unlikely to do well as older people drive less — and any sector, like autos, directly exposed to the coming Washington battles should be treated with great caution. The truly adventurous can try to discover how a widely anticipated megadeal between the US and China might affect trade. This fascinating research by Gerard DiPippo holds some clues. But then, maybe there won’t be a megadeal at all, or even a deal. It is hard to price in this level of chaos.
At the same time, the ongoing transfer of wealth from the large boomer generation to the smaller inheritor generations means that wealth will become yet more concentrated in the upper middle class and in those parts of the United States where they are disproportionately represented. Businesses that serve them will benefit. (Mike O’Sullivan’s last post on The Levelling dug into this.) But when the current expansion does end, investors will need to be prepared for a society whose instability will increase as its prosperity becomes less evenly distributed and the Trump administration’s promises of a working-man’s revival go mostly unfulfilled.
Is this Peak Trump? In several senses, yes. This series has argued that the means the president has used are not likely to achieve the goals he has declared or the promises he has made to his core constituency. So it is very hard to see how his political standing can much improve in the coming year. At the same time, it is equally difficult to see how the socially conservative, working- and middle-class, majority male and majority (but by no means exclusively) white, anti-woke Trump voting group will get less Trumpy even if Trump himself fades. The analysis here suggests that group’s discontent is most likely to increase.