January 2017 Global Macro Views

What a difference a day makes, especially when that day, November 8, 2016, brought into office as unconventional a political force committed to change as Donald Trump. Since the election, the halls of Washington, DC and the lobby of the Trump Tower in NY have been filled with talk of increased infrastructure spending, tax reform, and regulatory relief. Economic data have come in

stronger than forecasted by economists, and surveys show consumers and businesses to be more confident. Equity prices have gained 8-1/2 percent, creating more wealth for households, and sufficient to offset the drag associated with a ½ percentage  point increase in longer-term yields.  As a result, we have marked up the Standish forecast for US real GDP growth in 2017 and expect some of this strength to be shared with trading partners in light of appreciation of the foreign exchange value of the dollar. This provides important support at a time when the Federal Reserve is tightening policy and the European Central Bank and the Bank of Japan seem unable or unwilling to ratchet up their monetary accommodation. 

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