February 2025 Update: Executive Order Disorder

Executive Order Disorder

Since his inauguration, President Trump has signed a series of Executive Orders, a common occurrence after elections. However, this time, the resulting disorder and confusion have been notable both domestically and internationally. While every administration seeks to implement its policy vision, the scope and impact of these executive actions have sparked debate across the political spectrum.

Republicans are focused on maintaining tax cuts while also considering ways to address the budget deficit. To balance these priorities, spending reductions are being discussed. Some executive orders have aimed at reducing the number of federal employees and cutting foreign aid. However, it is important to recognize that executive orders cannot directly override funding that Congress has already approved. Any attempt to do so would likely raise constitutional concerns. Despite this, congressional response has been limited, as Republicans currently control both houses.

At the same time, fluctuating tariffs and discussions surrounding Greenland and Gaza have added complexity to the administration’s economic and foreign policy approach. The challenge lies in distinguishing between strategic negotiation tactics and spontaneous presidential remarks. So far, markets have remained relatively stable, but a constitutional dispute over executive orders could contribute to increased volatility.

Regardless of political affiliation, it is important to acknowledge that elections give leaders the mandate to review and adjust policies over time. However, abrupt actions—such as cutting off foreign aid, halting previously approved funding, or treating the federal workforce as temporary—may be too extreme. The U.S. has long benefited from foreign aid, which has contributed to global stability in regions affected by drought, poverty, and famine. Additionally, U.S. farmers benefit from programs like USAID’s Commodity Credit Corp, which purchases billions of dollars in American agricultural products each year. A drastic reduction in foreign aid could have unintended consequences, including heightened geopolitical instability and economic ripple effects. Ultimately, ensuring fiscal responsibility while maintaining America’s strategic interests at home and abroad requires a balanced and measured approach. 

We remain committed to monitoring interest rates and the broader economy, continuously assessing our market outlook as events develop. If you have any questions, please feel welcome to contact us.

The Bond&Devick Team