Reuters poll says another 'two to three' years of growth for US
(ShareCast News) - According to a recent poll of economists undertaken by Reuters, the US economic expansion will last "at least another two years," but perhaps not at the speed which the Trump administration had promised.
Recovery from the financial crisis - which rocked the globe between 2007 and 2009 - has been unusually lengthy, with the poll predictions expecting the growth stretch to eventually become the longest economic expansion in more than 150 years.
The White House has aimed to increase annual growth to 3%, predominantly through tax cuts.
But with Trump's inability to repeal and replace the Affordable Care Act, it seems unlikely significant fiscal stimulus will appear as the economy has shown no signs of accelerating to meet his targets.
The US gross domestic profit (GDP) grew 2.6% in the second quarter of the year, and the latest poll suggested further drops to between 2.1% and 2.5% until the end of 2018.
Slower spending due to a decrease in the growth of wages, despite the increased employment levels across the country, was to blame for some of the backwards momentum but that has not deterred the markets, which have been setting record highs all year.
"Expansions don't go on forever," said Sam Bullard, senior economist at Wells Fargo, who stated there was a further two to three years of growth to come. "Steady, moderate growth looks like it could stay in place for a while."
94 of 100 respondents believed the Federal Reserve Bank would announce steps to minimise its $4trn balance sheet in September, saying it would likely raise interest rates by 25 basis points in either October or December, following it up with three further rate hikes of the same amount throughout 2018.
"What the Fed is doing right now is saying the healthy economy combined with strong financial conditions more than make up for the disappointment in inflation," said Ethan Harris, head of global economics at Bank of America Merrill Lynch.
"They are very likely to announce their balance sheet shrinkage in September and see better-than-even odds they will even hike in December."