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Tag Archives: US fiscal stimulus

US federal budget update—free hugs

Nudged by the White House, Congress is in fiscal easing mode in the belief that the US economy needs further stimulus. Meanwhile, some medium-term debt issues remain unaddressed.Washington DC is in fiscal easing mode. Having voted for bold tax cuts in December, Congress is now increasing the theoretical spending limits for this year and next, by USD 300bn. This comes even though budget data for the past two years have been disappointing notwithstanding a solid labour market.From a growth...

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Trump’s proposed budget is light on details

Heavy on spending cuts, but containing dubious revenue calculations, the president’s budget plan is unlikely to be adopted by Congress. But we still expect tax cuts by year’s end.President Trump’s budget request was issued yesterday. Higher defence and infrastructure spending are proposed, more than compensated for by drastic cuts in other spending. The consequence is that total outlays are reduced dramatically.On the revenue side, the budget plan was very short on details. It assumes that...

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The potential impact of a Trump fiscal stimulus

Using in-house modelling, we are able to assess the broad consequences of a much-mooted fiscal stimulus on the US economy and the main asset classes.Our core scenario for the US is for real GDP growth of 2% in 2017 and 2.3% in 2018. This assumes that fiscal policy will be only modestly stimulative. However, with the election of Donald Trump as US president, the possibility of a radical change in public policy has increased markedly—possibilities, which enter into our alternative scenarios...

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US GDP picked up in 2H 2016; outlook for 2017 unchanged

In spite of softness in headline Q4 GDP figure, growth momentum in the US picked up in the second half of 2016 and should be underpinned by fiscal stimulus later this year.US GDP growth decelerated from 3.5% in Q3 to 1.9% quarter-on-quarter annualised in Q4, below consensus expectations of 2.2%. However, this soft reading was mainly due to a reversal of the surge in soybean exports in the previous quarter, while growth in final domestic demand picked up from 2.1% in Q3 to 2.5% in Q4....

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U.S. growth to slow in H1 2017 before rising again in H2

The tightening of monetary conditions is impeding near-term prospects for the US. But a probable fiscal stimulus will help revive growth again in the latter part of 2017.US GDP growth was revised up from 2.9% to 3.2% for the third quarter. The main reason was a higher estimate of growth in consumer spending. Turning to Q4, economic data published so far have been mixed. Data on consumption in October were a bit disappointing. And advance estimates for the trade deficit and inventories showed...

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2017 growth forecast for U.S. remains unchanged for now

Recent data shows that consumer spending remains on track, but we see prospects dimming for economic growth in H1 2017, before rising again in H2 thanks to fiscal stimulus.Figures released on November 15 show that core retail sales in the US rose by a strong 0.8% month over month in October, well above consensus expectations. Moreover, figures for the previous months were revised up. We believe consumer spending will grow by around 2.5% q-o-q annualised in Q4 (2.1% in Q3) and that it should...

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