Donald Trump’s unexpected election victory means that we are likely to see a major fiscal stimulus enacted in the first half of next year. As a result, we now expect GDP growth to accelerate to 2.7% in 2017, before slowing to a still healthy 2.2% in 2018. We expect the Fed to raise interest rates later this month and anticipate an additional 100 basis points of tightening next year, taking the fed funds target range to between 1.50% and 1.75% by end-2017.
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