It is time to cut.

We are not talking about the Fed, but, and what is probably more important, President Donald Trump just released a partial outline of his 2018 budget, which contains a long list of government spending cuts aimed at funding defense and domestic security.

In one sense, this is a classic example of tackling the economic problem of how does one allocate finite resources amongst infinite desires.

Economists can come up with solutions for the problem, but the balance ends up being a political risk.

Some of the proposed cuts have been watered down. The State Department funding cuts for instance.

The question now is not really about the presidential proposals.

The president proposes, but Congress disposes and it is that relationship that will now matter to investors.

The Trump healthcare proposal has run into difficulties, raising questions about both the legislative agenda and the extent to which there will be collaboration between the White House and Congress.

If Congress offers strong resistance to the presidential budget proposals, then investors may question the viability of other aspects of the president’s policy agenda.

As the overoptimistic markets have seemingly priced in parts of the proposed policy agenda, that will then matter to asset prices.

Separately, the latest Muslim and thus revised travel ban has been suspended by U.S. Federal Courts in Hawaii and Maryland, which without any doubt represents a political distraction for the President.

This is less immediate relevant for financial markets. The danger for investors is that assuming what appears on Trump’s Twitter feed will automatically become reality.

The Federal Reserve raised U.S. rates, albeit in a very dovish context. This was not a surprise to anybody as the move was very carefully signaled.

The tone of Fed Chair Janet Yellen at the press conference that followed the Federal Open Market Committee’s (FOMC) decision to raise the Fed funds rate by 25 basis points seemed to be aimed at validating the current market expectations, which focus on 2 further rate increases this year, rather than trying to shift to a more, or indeed a less aggressive monetary policy position.

In the Euro area, the Dutch election got an extremely high turnout like something around 80 percent and a very strong showing by the pro-euro forces.

Wilders’ nationalist and right-wing populist political Party for Freedom (Dutch: Partij voor de Vrijheid, PVV) did worse than opinion polls had predicted.

One of the common trends recently is that opinion polls do seem to be faring far less well as predictors when turnout is unusably high.

The most predictable about this election result was the attempt by the media to translate a Dutch election result into a political story for the Euro area as a whole, and in some cases the world beyond.

What happens in The Hague (The Hague is the seat of the Dutch government, parliament, the Supreme Court, and the Council of State, but the city is not the capital of the Netherlands, which constitutionally is Amsterdam) offers little importance for Paris.

To connect the result of the Dutch elections to the final result of the French elections, which is due on May 7th, is the same as to draw a straight line between 2 unconnected points.

Of course, that will not stop investors from trying to extrapolate, but it may be unwise to do so as there is no reason why the failure of Wilders indicates anything about the French elections of Marine Le Pen’s right-wing populist and nationalist party the National Front (French: Front National, FN) performance.

China raised interest rates overnight in the wake of the US move, which is a matter of mainly local concern.

Besides that, we just got annual Euro area consumer price inflation (CPI) that came in at 2.0%percent in February, up from 1.8 percent in January, confirming hereby that the CPI is now above the European Central Bank’s (ECB) target, but that will not change ECB’s President Draghi addiction to easing, which should endure, at least for the time being.

Over in the UK, the Bank of England (BOE) meets. The market is not looking for a shift in BOE policy yet.

The UK’ unemployment rate did fall to 4.7 percent, which is its lowest rate since 2005, but at the same time the labor market showed a decline in quality as it produced lower quality jobs rather than fewer jobs while it delivered still subdued wages.

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.