Last Friday, a milestone was reached.
By Peter Navarro | Real Clear Markets | February 9, 2026
On April 7 of last year, with tariff panic gripping the markets and the Dow plunging toward 38,000, I went on CNBC’s Squawk Box with a simple message: relax. The Dow was on a clear path to 50,000.
Last Friday, that milestone was reached.
My forecast wasn’t luck, bravado, or market cheerleading. It was analysis—rooted in a supply-side growth model that Wall Street continues to underestimate, misunderstand, or dismiss outright.
The Trump economy is engineered for sustained expansion. It runs on four mutually reinforcing growth engines.
First, tax relief. Lower marginal rates on businesses and workers increase after-tax returns on investment, raise labor participation incentives, and accelerate capital formation. The result is faster productivity growth—the only durable source of rising real wages.
Second, deregulation. Rolling back unnecessary compliance costs lowers fixed costs across manufacturing, energy, transportation, and finance. This is not ideological—it is arithmetic. Reduced regulatory drag raises output per unit of capital and labor, expanding potential GDP.
Third, strategic energy dominance. Abundant domestic energy does more than lower gasoline and diesel prices. It reduces electricity costs, and critically, fertilizer and petrochemical input costs. Energy is embedded in almost everything. When energy is cheap and reliable, inflationary pressures fall and margins expand across the economy.
Fourth—and most misunderstood—strategic tariffs.
The Trump tariffs are not inflationary taxes on American consumers, as critics reflexively claim. They are defensive instruments against foreign dumping, subsidies, and mercantilist currency practices.