Aerospace and defense ETF investors will be closely watching President Donald Trump’s proposed $4.4 trillion federal budget as it includes a sizable increase in Pentagon’s budget.
Trump’s new spending plan could allocate an additional $74 billion to the Pentagon’s budget, a 14% increase, Bloomberg reports.
The $686 billion defense request for the fiscal year ahead would help the Navy hit a new goal of 355 ships, restore major funding for a Boeing Co. fighter jet favored by the Oval Office and increase missile defense spending to counter threats, according to a Bloomberg report.
The defense spending would help replace old Navy ships nearing the end of their useful life and expand the fleet to 299 vessels by the end of fiscal 2019. Missile defense has also seen greater urgency in face of rising threats of North Korea’s accelerated missile and nuclear programs. Lastly, Trump has praised Boeing’s Super Hornet, which President Barack Obama’s administration sought to phase out.
However, the exorbitant defense package could come across many hurdles in Congress as officials debate the finer details of the proposed spending plan.