Morgan Stanley senior portfolio management director Jim LaCamp believes the new year is going to ring in good news for American businesses, especially thanks to the Trump administration.
Between the Big, Beautiful Bill and other Trump administration policies, the economy in 2026 is likely to beat normal expectations for the second year of a presidential term, with promising signs for businesses. LaCamp went on Fox Business to discuss both his optimism and his cautions for the coming year.
Donald Trump is supposed to appoint a new Federal Reserve chairman, which introduces an element of uncertainty into the economic future of 2026, but it is likely to be an improvement over current woke chair Jerome Powell. After all, Powell has attempted to put up obstacles against Trump‘s economic agenda and wasted significant amounts of money on building himself a new headquarters. Change is needed.
LaCamp, meanwhile, explained, “Fed funds features are suggesting a bit more than a 50% chance of a rate cut in March, and we need that — we need it particularly for private credit, private equity, and particularly for the housing market as well. But I think we’ll get rates coming down.”
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2026 is important as a test for the power and success of the Trump economic agenda. “And the other thing to remember, even though the second year of a presidential cycle is typically a little rocky here, we have a lot of things coming in businesses that are good,” LaCamp enthused.
He continued, “We have several aspects of the Big, Beautiful Bill that are business friendly, we have deregulation kicking in. And so there’s a lot of things that are positive drivers historically for the markets that are in place. So I think we can rally. I don’t think it’ll be as much as this year, … but I think we’ll see positive gains.”
Rates continue to be a concern for 2026, particularly as they affect the housing market, and there are still some reasons to be cautious, according to LaCamp. “Inflation picture is a little muddy,” he observed. “Looks like it’s improving a little bit. Deregulation should help that — low oil prices should help that, but it’s still a question that needs to be answered. The other concern I have … is everybody on Wall Street is bullish.”
But while, unsurprisingly, there are concerns, overall the picture going into 2026 is much brighter thanks to the Trump administration. “Robotics is as an adjacent area to AI, and these companies are all doing very, very well, and with very solid earnings profiles, and overall, it’s a very good backdrop for stocks,” LaCamp said.
One ongoing issue is the weakening of the United States dollar, and its tenuous position as world reserve currency, a position that our enemies like China and Russia want to undermine. But in the short term, LaCamp argued, a somewhat weak dollar does not necessarily sabotage economic success. The goal is to strengthen it in the future.
It is therefore safe to say that American businesses can celebrate the new year without fears about impending economic catastrophe’; instead, they can be optimistic about a brighter future.
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