Looking For a Sugar High
Author: Greg Valliere
February 9, 2026
It’s extremely difficult to fine‑tune an election result, but the Trump White House is looking for an economic “sugar high” this spring as the fall campaign begins.
Phase One has been a success — a roaring stock market, with the Dow Jones breaking through 50,000.
Trump’s goal is to hang on to Republican control of the Senate and House this November; the latter looks difficult, and a strong stock market may not be enough.
Many Americans want more than just a strong stock market — they want a solid economy, which may require more aggressive monetary and fiscal policy. New Fed Chairman Kevin Warsh is expected to cut interest rates starting in the spring.
The more intriguing issue is fiscal policy. Sources tell us that the White House is looking for a burst of domestic spending and tax refunds. The budget deficit will be ignored.
Whether Trump can secure additional fiscal stimulus is debatable, as consumers face rising health and food prices.
Trump is expected to call for more stimulus — we believe he will unveil additional tax cuts and will boast about refunds, overtime tax relief, and cuts to Social Security taxes on tips, among other measures.
Two fiscal factors will be crucial: first, whether Republicans can get much done with a House vote margin of only one or two seats; and second, whether Trump can overcome his dismal polls.
Republicans in Congress were in an uproar last week when Trump refused to apologize for a blatantly racist attack on the Obamas, saying, “I didn’t make a mistake.”
Our bottom line is that the economic sugar high will come too soon for the Republicans, and by November the steady diet of stimulus may be irritating the bond market.
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