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Reflections on a Year That Changed Everything

April 2017
Richard L. Quad
paBanker, Quarter 1, Volume 19.1 

You can’t talk about the last year without the election being front and center. Heading into the election, the headwinds in the banking environment were significant. Interest rates were low, the yield curve was flat and growth was stagnant. Regulators were focused on cybersecurity and commercial real estate concentrations, cap rates were stressed and competition for the limited credit opportunities was severe. The long, slow recovery showed no signs of speeding up. After the Trump victory, following a brief Brexit-type panic which came and went before the market opened the next day, the dialog shifted to growth, deregulation, corporate tax reform and a rising rate and steepening yield curve environment. Domestic-based industries not affected by the protectionist rhetoric of the incoming administration, with financials in the spotlight, rose to new highs, and after stopping to catch its breath at year-end heading into the inauguration, the market continued higher with the Dow crossing 20,000 in late January. With a Republican House, Senate and White House, a business-friendly environment was sure to come.

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Richard L. Quad