2017: It’s Bigger than The Donald
It’s not just about Trump – it’s about what got him elected, a global grass-roots turning away from safety and toward opportunity. In 2017 immediate good will come from Trump’s deregulatory agenda; pro-growth tax cuts are highly likely; there will be less public infrastructure spending than the market expects; and there will be saber-rattling about protectionism, with little action. US and global economic growth will accelerate, and inflation expectations will continue to revive. The Fed will be gradual and cautious, not tightening per se, but hiking only when there is evidence that the “neutral rate of interest” has risen. It will be a good year for stocks and commodities globally, and a poor one for bonds. The dollar will weaken, and emerging markets will perform well. Oil will get to $65, probably in the first quarter.