Estimating the impact of the US fiscal policy on growth, fixed-income markets and the dollar

 

Estimating the impact of US fiscal policy on growth, fixed-income markets and the dollar

After the Tax Cuts and Jobs Act of 2017 (TCJA), a major tax overhaul approved just before the end of the year that introduced significant tax cuts for both individuals and corporations, in early February the U.S. Administration passed the Bipartisan Budget Act of 2018 (Budget Act) that would add increased government spending on top of the fiscal stimulus. Immediately after, the White House presented the President’s Fiscal Year Budget 2019 (President’s Budget) further pushing, among other actions, for increased infrastructure spending. All these measures would add upside risks to our base case economic projections for growth and inflation for which we provide estimates  herein.

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