US economy set to grow under Trump, but US Fed frets

Almost all Federal Reserve policymakers thought the United States economy could grow more quickly because of fiscal stimulus under the Trump administration and many were eyeing faster interest rate increases. Minutes from the central bank’s December meeting, released on Wednesday, showed how broadly views within the Fed are shifting in response to President-elect Donald Trump’s promises of tax cuts, infrastructure spending and deregulation. Such changes could boost inflation and might set the stage for a confrontation between a president seeking to boost economic growth and the Fed, which is tasked with keeping the economy from overheating. “About half of the participants incorporated an assumption of more expansionary fiscal policy in their forecasts,” according to the minutes from the December 13-14 meeting, referring to the 17 policymakers who participated.

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