The Trump administration has quietly shifted its economic messaging, moving from a focus on deficits and bond yields to an almost singular push for growth.
According to economist Alex Krueger, that largely under-the-radar pivot could help calm recession fears and offer another boost for the stock market.
Krueger highlighted the shift in tone following Treasury Secretary Scott Bessent’s recent remarks about the need to “change the growth trajectory of the country [and] economy.”
“Previously, Trump’s strategy was interpreted as ‘inducing pain to lower yields, deficits, and thus debt,’” Krueger wrote. “Now, it’s the opposite: ‘grow the economy faster than the debt.’ A welcome and necessary pivot.”
Notice how significantly the narrative has shifted. Previously, Trump's strategy was interpreted as 'inducing pain to lower yields, deficits, and thus debt.' Now, it's the opposite: 'grow the economy faster than the debt.' A welcome and necessary pivot. https://t.co/NDrXrDmvaM
undefined Alex Krüger (@krugermacro) May 23, 2025
The narrative change comes just days after Trump’s controversial "One, Big, Beautiful Bill" passed the House, clearing a major hurdle toward becoming law.
The legislation — which includes sweeping tax cuts and expanded federal spending — has drawn sharp criticism from deficit hawks, with some economists dubbing it a “big, beautiful mistake.”
The Congressional Budget Office estimates the bill would add $3.8 trillion to the federal debt over the next decade. A separate model from the University of Pennsylvania projects a $3.3 trillion increase over the same period.
Although widely critized, the bill may help the U.S. dodge a full-blown downturn after GDP contracted in Q1. The Atlanta Fed’s GDPNow model currently forecasts 2.4% growth for Q2.
Although widely criticized, the bill could help the U.S. skirt a full-blown downturn after GDP slipped in Q1. The Atlanta Fed’s GDPNow model currently projects 2.4% growth for Q2.
It’s been a wild ride for stocks
Stocks initially soared after Trump’s re-election on hopes of business-friendly policies. But it didn’t take long before the rally unraveled once the new administration shifted to fiscal tightening and aggressive tariffs.
The resulting trade war sparked a sharp bond selloff and sent the market into one of its most volatile corrections in recent memory.
The market turned again after the White House softened its trade tone, culminating in a May 12 deal with China that involved a 90-day tariff truce.
After slipping into a technical correction in March and extending losses in April, the S&P 500 has staged a strong comeback and now sits just 3% below its all-time high.
The new leg up has analysts scrambling to dial up their targets to new records.
Strategic Wealth Partners CEO Mark Tepper told Fox News last week that markets tend to recover quickly from “policy-driven” bear cycles, and when they do, momentum usually holds.
He flagged the broad strength in tech and industrials, pointing out that more than 90% of stocks in those sectors are now trading above their 50-day moving average.
That’s a bullish technical indicator that suggests this rally still has room to run.
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