Economic Impact of Trump's Victory
by HBA of North Georgia on 11/20/16
President-elect Donald Trump will undoubtedly have a
profound and lasting impact on economic policy throughout his
presidency. Costly business regulations are likely to be reduced or
rolled back; rate-reducing, base-broadening, comprehensive tax reform
will be under active consideration; and the leadership of the Federal
Reserve will change in 2018.
The nation's low unemployment is placing pressure
on the Federal Reserve to raise short-term interest rates, and those
rates will influence many future policy decisions. The incoming
Administration, in cooperation with a Republican-controlled Congress,
will likely pursue policy that will boost GDP growth in the short run.
However, if policy changes result in a growing deficit or overheating
labor markets, interest rates will rise (faster) in response. Moreover,
any policy changes that restrict trade will act as a drag on economic
growth.
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