US: Upside risk to H1 2017 growth – BNPP

Research Team at BNP Paribas suggests that the US economy has outperformed lately: the Bloomberg US economic surprise index is at its highest level since mid-2014.

Key Quotes

“Upside surprises have been fairly broad-based, suggesting the economy is on slightly stronger footing near term. These developments have introduced upside risk to our H1 2017 growth outlook of 2.2%. On the other hand, President elect Trump has increased uncertainty regarding US trade policy and the Fed appears to be in no mood to join a fiscal party with unemployment already at 4.6%. The possibility of escalating geopolitical tensions and excessive tightening of financial conditions (particularly through exchange rate channels) are important downside risks to the growth outlook.”