"Some additional tax cuts seem probable in our view, although the timing, size and specifics are highly uncertain," Wells Fargo economists Jay Bryson and Michael Pugliese wrote in a research note.
Trump has proposed adding a tariff of 10-20% on all imports with significantly higher levies on imports from China. Forecasters at Pantheon Macroeconomics project that a 10% tariff would increase inflation by about 0.8 percentage points next year and impose an additional drag on U.S. manufacturers.
Investors expect a more business-friendly administration, including tax cuts. The extension of most individual tax cuts, at a minimum, appears likely.
While Trump says tariffs would encourage businesses to set up shop in the U.S., economists are dubious. It will remain much cheaper to source goods overseas.
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