US should grow 2.8% this year - ING

Research Team at ING notes that we have seen little detail on Donald Trump’s fiscal agenda and the presumption is that Congress will water down some of the plans he presents in his February – but overall the US should grow 2.8% this year and 3.2% next.

Key Quotes

“What we have seen, however, is a more hawkish Fed that expects three hikes this year instead of two. We tend to favour hikes in March and June, followed by focus on the Fed shrinking its US$4tr balance sheet.”

“Loose fiscal and tight monetary policy is typically positive for a currency. The main US challenge to the dollar will come from Trump’s hawkish trade team, where fears of protectionism could intermittently weigh on USD. Strong dollar policy is also in focus.”

“ECB will look to keep the EUR as weak as possible for as long as possible. But undervaluation should lend support to EUR by end-17.”