Report | Economic insight for September 13, 2017
The economy was buffeted by a number of surprises last week. President Trump raised eyebrows by signing a deal with the Democrats to push off ultimate decisions on both the federal budget and the debt ceiling. Both of those issues will have to be addressed soon, but this move clears the decks for at least the new few months to focus on tax reform. If done correctly, tax reform could provide a boost to the economy, but the legislative challenge should not be understated. The Federal Reserve announced that Vice Chair Fischer will resign from the Board of Governors next month. This move means that the president will appoint four of the seven Governors on the Open Market Committee, increasing the probability that the administration will be able to implement its agenda on financial and banking regulation. The extent of the damage from Hurricane Irma remains to be seen, but the combined impacts of Harvey and Irma will likely deduct roughly 50 basis points from GDP growth in the third quarter. Unemployment claims have already spiked due to Harvey and they should be elevated for awhile. Ryan Severino has the latest.
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