Short-term Economic Boost with Long-term Risks Under Trump’s Administration
January, 13 2017
The Federal Reserve publicized on Thursday that the planned fiscal and tax plans under Tump\s administration could boost the economy for short term with estimated 4 percent growth but in effect would being extended inflation and rise in debts in the future. The said economic growth will be achieved through direct spending and increase in consumption and investments after tax cuts and less strict regulation to encourage more businesses.
Although the Federal reserve president noted in his conversation with a life insurance company, that plans for long-term are much needed to counteract the problems such as aging population and less productivity. Moreover, Fed officials said during their December policy meeting that policy rates for this year will occur at a much faster pace with 3 forecasted rate hikes for this year compared to one rate a year hike since 2015.
