Consumers, businesses and investors are waiting to see how events at home and abroad will affect the U.S. and global economy. We asked five economics experts to predict the big financial story of 2017. Here’s what they said:
“I’m not sure how anyone can predict what’s coming, given the number of times the administration has backed off campaign promises and rhetoric. But all eyes will remain on the Fed to see what happens with interest rates and Trump’s promises to restore jobs in exchange for so many votes.
“And don’t forget the power of the American consumer: A large chunk of the GDP is consumer spending and it looks like many of America’s malls will be shuttered as more shoppers would rather use Amazon.” —Alecia Swasy, Reynolds Chair & Professor, Washington & Lee
“I had thought that the big financial stories of 2017 would be the negative consequences of Trump repealing Obamacare, enacting a border tax, instigating trade wars and freaking out the stock market with his unpredictability. None of that has happened as of mid-April, so what do I know? Tax reform could emerge as the big story if the Republicans end their civil war. The market could still freak out. You’ve got to wonder about a bubble when Tesla is worth more than GM or Ford and when Snap pulls off a big IPO without ceding governance to shareholders.” —Alan Deutschman, Reynolds Chair & Professor, University of Nevada Reno
“The big financial story will be the GOP government’s effect on the economy and the markets. One year is a fair amount of time to judge reaction, although if the first three months of the administration are any indication, the reaction may be little. Already we have the failure of the “unified government” to make any major changes in the health sector. There is much talk about the Trump budget but in fact his proposals do nothing to change total spending, just make major cuts in most areas to balance an increase in military spending.
“It is also important to note that despite electing a “unified government,” with one party in control of both the executive and legislative branches, the Republicans are far from unified, with a majority interested in establishing a government along traditional conservative ideological lines but with a significant minority seeking something far more radical, specifically the elimination of as much of the government as possible. That significant minority, as we saw on the healthcare issue, is enough to deny the majority the ability to legislative without the cooperation of the Democrats. How this all shakes out will be the financial story of the year.” —Scott Gurvey, contributor to businessjournalism.org
“Barring an unforeseen stunning development, world trade looms largest on the 2017 economic horizon. However the administration’s currently contentious trade relationships with China and Mexico ultimately play out, the results are sure to have significant effect on business, jobs and longer-term global relationships.” —Andrew Leckey, President, Donald W. Reynolds National Center for Business Journalism
“Donald Trump ran on jobs and “America First.” But it is the U.S. relationship with the rest of the world that has become and will continue, I believe, to be the financial story of the year.
“Longtime allies are all taking the temperature of an administration that promised “a big beautiful wall” on the border with Mexico, the third biggest trading partner with the U.S., and dismissed NATO as “obsolete.”
“100 days in there has already been a missile strike in retaliation of a chemical strike in Syria and the largest non-nuclear bomb dropped on a suspected ISIS hideout in Afghanistan. Relations with Russia have deteriorated to the Cold War era and tension with North Korea is escalating.
“This is a president who ran as a nationalist. But even the largest superpower in the world cannot go it alone. We are seeing early on that the president has shifted his stance on international affairs—and how this plays out in all these hot spots is of huge economic importance.” —Susan Lisovicz, Visiting Professor of Business Journalism, ASU