It’s less an administration change and more of a regime change. The very nature of decision-making has shifted. You have an imperial presidency testing the Constitution, the courts, and convention, pushing to see how far it can go. Trump is running the US the way he ran his business empire: very top-down, and not necessarily using institutions for their intended functions. This all adds to unpredictability for markets.
Yet the market reaction has already calmed down in the past week?
The financial markets are struggling just like everyone else with what reality even is. In the absence of clarity, they’re making it up as they go along and grasping at straws. Markets are focusing on any moments of calm rather than the wild swings that are becoming the norm. And it's not just financial markets: corporate America is clinging to the belief that this is just the early chaos of a new administration. They're hoping Trump will revert to "normal", but that’s a risky assumption. If we’re still facing this chaos in a year, and if the challenge to institutions, especially the courts, proves structural and fundamental, then we’ll face much rougher waters. If the Supreme Court doesn’t impose some adult supervision and logic, I think the swings in financial markets, and in oil and energy markets, could become much more extreme.
How much optimism should we place in the recent US-Iran talks?
For now, the signs are positive, but the devil is in the details. An Iran deal would be a big test of the administration. Whether the timelines the Iranians want to work on align with Trump’s patience level remains a big question. Also, will the Israelis sit quietly and let a nuclear deal happen that they fundamentally oppose? Netanyahu’s comments about a Libya-style dismantling versus Trump’s comments shows a wide gap between them. This all feeds into the same element of unpredictability. We are entering a truly new world - with very different implications for the likes of OPEC, Iran, and regional policymaking.