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Trumponomics Daily—Thursday, February 16

For our new cover story, live online this morning, Fortune senior editor Shawn Tully goes deep to map the promise and peril of Trumponomics. Corporate executives are feeling a “big improvement in animal spirits,” as Honeywell CEO Dave Cote puts it, a sentiment reflected in the markets’ post-election giddiness and surging small-business optimism. But the expectations of huge gains in economic growth come with fears of downsides that Trump could just as easily unleash if he, say, sparks a trade war or imposes a draconian immigration crackdown. “Put simply,” Tully writes, “American has never witnessed such a contradictory mix of free-market and antigrowth policies in the White House. Or a President who operates in such an unorthodox and unpredictable way.”

Needless to say to anyone who’s been conscious in the last month, it’s made for a highly combustible dynamic. Even Tom Barrack, one of Trump’s closest friends and chairman of real estate investment manager Colony Capital, acknowledges that while he thinks things are moving in the right direction, he’s “seeing lots of nervousness.” Washington is now the center of economic gravity in a way not seen since the eruption of the financial crisis. Tully writes it revolves around a “hair-trigger temperament [with a] penchant for launching scorched-earth attacks on a daily basis.” That’s prompted some second thoughts on Wall Street, with Bridgewater Associates founder Ray Dalio and Goldman Sachs alike recently warning clients that the damaging effects of populist policies could overwhelm the benefits of the pro-business portion of the agenda. Piece by piece, Tully lays out the stakes in each plank of Trump’s plan — tax reform, deregulation, infrastructure spending, immigration enforcement and trade — handicapping their potential impacts and the challenges to getting them done. Trump’s debut hasn’t done much to help. But Barrack, pointing to daily conversations with Trump, says that the turmoil doesn’t bother the president: “He thinks it’s a revolution, and all of the tumult is normal. He’s not bothered at all by all the divisions in Congress and the electorate.” In other words, if you hadn’t already, buckle up.

Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com

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Loose change

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