The US economy closes 2016 on a relatively good note but questions remain over what President-elect Donald Trump will bring to the economic backdrop, says David Page, senior economist (US and UK) at AXA Investment Managers.
Speaking in the above video, which continues Professional Adviser's Architas Advent Calendar counting down to Christmas, Page discusses the early indications that Donald Trump's presidency will be marked by a corporate-focused fiscal stimulus. Page also expects the trade tariffs and protectionist measures Trump campaigned on will be de-emphasised.
He said: "We expect the new administration to focus on policies that will boost growth across 2017. We also expect to see export growth remain relatively soft with a subdued global environment and a strong dollar again. With this fiscal stimulus coming through our forecast is for the US economy to grow above trend, at 2.1% next year and 1.9% into 2018."
Page added: "The fact that the dollar's already tightening, and that longer-term bond yields are already tightening, will perhaps make the Fed a little bit cautious in how it proceeds. By the end of 2018 we are looking at a Federal funds rate of between 1.75% to 2%."
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