UNCERTAINTY TRUMPS ALL: 2017 U.S. ECONOMIC OUTLOOK
While it is too early to assess the full impact of the 2016 election; one thing is for certain, electing a bull to the run the china shop does raise several questions:
Will promises to create high-paying jobs materialize?
What will be the impact of tax reform?
Will regulatory reform level the playing field?
How will healthcare reform impact employers?
How will the new Administration’s policies impact trade?
These questions don’t even address the potential fallout from looming international crises, increased political polarization, or scandal.
As 2017 is a change year, the emphasis on government policy is to be expected. However, this does not mitigate the fact that the emphasis on policy is a sad commentary on the role government plays in a supposed ‘free market’.
In fact, this concern has been echoed by clients who have mentioned that change is not the issue. Rather the question is what form will the changes take, and importantly, how quickly it will be implemented.
Another factor leading to uncertainty is the age of the current economic expansion. At 124 months, and counting, it is on the verge of becoming the second longest since World War II. While Federal Reserve Chair Janet Yellen is on the record as stating ‘its’s a myth that expansions die of old age,’ the sheer length of the recovery raises the specter that some sort of correction might be on the horizon.