The Trump $1.5 trillion hefty tax cuts and $1 trillion infrastructure expenditures may speed up the Federal Reserve interest rate hike.

Joseph Corr

2018-03-15 07:41:00 Thu ET

The Trump administration's $1.5 trillion hefty tax cuts and $1 trillion infrastructure expenditures may speed up the Federal Reserve interest rate hike due to robust labor market growth. The U.S. economy adds more than 313,000 non-farm payroll jobs in early-2018. The stellar key labor market growth is stronger than most macro projections, and the U.S. unemployment rate stays at 4.1% or the lowest level in 17 years. Wages also grow at 2.6% and remain a few notches below the prior pace. Productive progress in U.S. employment and economic output continues without higher inflation near the 2% target. In accordance with most macro expectations, the Federal Reserve expects to raise interest rate 4 times in 2018 and maybe 3-4 times in 2019. The current neutral interest rate hike helps attain the congressional dual mandate of maximum employment and price stability.

Senate majority leader Mitch McConnell announces the new budget deal. This deal can be sustainable with $15 trillion national debt and $80-$95 billion budget deficit projections over the next 2 years. A key issue concerns how long Congress should raise the national debt limit, which the U.S. economy may hit as soon as April 2018. Republicans and Democrats still need to negotiate the exact parameters to reach bipartisan agreement.

 


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2019-06-27 10:39:00 Thursday ET

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Presidents Trump and Xi agree on an interim trade truce at the G20 summit in Argentina.

Apple Boston

2018-12-09 08:44:00 Sunday ET

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Chanel Holden

2019-06-03 11:31:00 Monday ET

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2017-02-01 14:41:00 Wednesday ET

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Fed Chair Jerome Powell increases the neutral interest rate to a range of 1.5% to 1.75% in his debut press conference.

Chanel Holden

2018-03-21 06:32:00 Wednesday ET

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