Trump a Risk But Economy Should Expand in 2017, According to one Economist

Trump's skepticism of free trade, and determination to get "better deals" from Mexico and China, brings the risk of "tit-for-tat protectionism" that could have a negative impact on the U.S. economy, said Alan Levenson, chief U.S. economist at T. Rowe Price. That said, Levenson believes the U.S. expansion has room to run in 2017, and the near-term risk of recession is low. Levenson said proposed tax cuts and de-regulation, and the possibility of an infrastructure investment program would be stimulative of the U.S. economy in the short term, even if they do send budget deficits and interest rates higher. Levenson added that interest rate normalization by the Federal Reserve Board will continue at a gradual pace in 2017, and further progress toward "full employment," reinforced by the November 4th payroll numbers, is keeping the Fed on course for a December rate hike.