"In the US, the double dose of caffeine from tax cuts and spending increases is already starting to wear off," Ethan Harris and Aditya Bhave of the BAML team wrote. At the same time, the US is expected to get hit with growing headwinds from Trump's continued trade war with China and the Federal Reserve's interest rate hikes.


There are already signs that the boost from the tax cuts are fading and they could become more obvious next year, JPMorgan's economists said. They cited the slowdown in capital investment from corporations, for instance.


As Business Insider's Will Martin reported, Carpenter thinks the trade war could actually drag GDP growth below 2% as early as the fourth quarter of 2018.

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