As it stands now, our working assumption is that Trump and Congress will agree on a fiscal stimulus early next year, nearly all of it tax cuts, worth somewhere between $3trn and $5trn over the next decade. The mid-point of which would equate to an annual increase in the budget deficit of $400bn, or 2% of GDP. Nevertheless, for the time being at least, there are several reasons why we intend to stick with our forecast that GDP growth will be 2% next year.
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