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What does the equity term structure tell us about Trump 2.0′s first 100 days in office?

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Listed:
  • Golez, Benjamin
  • Kelly, Peter
  • Matthies, Ben

Abstract

We analyze the equity term structure during Trump 2.0′s first 100 days to examine the narrative from the Trump administration that his policies will bring short-term pain in exchange for long-term gain. We find that the price of short-term assets (assets that entitle the owner to the dividends of the aggregate market over the near term) increased in value, whereas the aggregate market itself decreased in value. This differs from the president’s narrative. The evidence from the pre-election period suggests that investors might have initially overestimated the short- and long-term impacts of Trump’s policies.

Suggested Citation

  • Golez, Benjamin & Kelly, Peter & Matthies, Ben, 2025. "What does the equity term structure tell us about Trump 2.0′s first 100 days in office?," Economics Letters, Elsevier, vol. 254(C).
    • Handle: RePEc:eee:ecolet:v:254:y:2025:i:c:s0165176525002976
    DOI: 10.1016/j.econlet.2025.112460
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    References listed on IDEAS

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    1. Stefano Cassella & Benjamin Golez & Huseyin Gulen & Peter Kelly & Stefano Giglio, 2023. "Horizon Bias and the Term Structure of Equity Returns," The Review of Financial Studies, Society for Financial Studies, vol. 36(3), pages 1253-1288.
    2. Golez, Benjamin & Matthies, Ben, 2025. "Fed information effects: Evidence from the equity term structure," Journal of Financial Economics, Elsevier, vol. 165(C).
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    5. Bansal, Ravi & Miller, Shane & Song, Dongho & Yaron, Amir, 2021. "The term structure of equity risk premia," Journal of Financial Economics, Elsevier, vol. 142(3), pages 1209-1228.
    6. Benjamin Golez, 2014. "Expected Returns and Dividend Growth Rates Implied by Derivative Markets," The Review of Financial Studies, Society for Financial Studies, vol. 27(3), pages 790-822.
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    Keywords

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G40 - Financial Economics - - Behavioral Finance - - - General

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