US: Trump inauguration in the limelight - Natixis
|Analysts at Natixis suggest that we are moments away from the inauguration of Donald John Trump as the 45th President of the United States and lists down the various proposals made by the president-elect and the House of Representatives.
Key Quotes
“Bearing in mind that nothing should be enacted in the first one hundred days of the new presidency and that there are very significant uncertainties as to the policies that will actually be implemented by the new administration, what information is available suggests that, in the short term, the key issues for the US economy will include: repeal of Obamacare care, tax reform (repatriation of profits earned abroad) and foreign policy (protectionist measures: construction of wall along border with Mexico, customs tariffs, renegotiation of trade agreements, etc.). By contrast, spending on infrastructure projects does not seem to be on the list of priorities”.
“At this point in time, we have integrated into our baseline scenario a reduction in the tax burden of households and companies and a slight increase in infrastructure spending, not however the introduction of customs tariffs. With the economy already at full employment (hence weak fiscal multipliers), the effects on real growth should be modest, but there will be an acceleration in inflation. On our estimate, growth will reach 2.3% and inflation 2.8% this year, with our scenario likely to undergo revision as and when the proposals of the new administration start to take shape.”
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