Pricing in Trump’s Speech at Davos

President Trump’s Davos speech signals a potential de-escalation in U.S.-EU tensions by removing the use of force from the Greenland acquisition debate, effectively lowering the risk of a broader transatlantic trade rupture. This shift has led markets to price out a "riskier" U.S. investment environment, reversing recent dollar weakness and treasury yield curve steepening. Regarding domestic policy, proposed caps on institutional single-family home ownership and credit card interest rates face significant legislative and procedural hurdles in Congress, particularly within the reconciliation process. While a 10% credit card interest cap could improve consumer asset-backed security performance by reducing defaults, it may simultaneously restrict credit access for high-risk borrowers. Ultimately, housing initiatives are expected to have only marginal effects on sales and minimal impact on home prices, as much of the regulatory authority remains at the state level rather than with the executive branch.