Tax reform delay means we need to tweak our GDP forecast

With the prospect of an early deal on tax reform fading fast, we now assume that the fiscal stimulus won’t be passed by Congress until the start of next year and, as a result, we are revising down our GDP growth forecast for 2017 and revising up our forecast for 2018. We now expect GDP growth to be 2.3% (down from 2.7%) in 2017 and 2.5% (up from 2.3%) in 2018. Once the stimulus fades, however, we expect GDP growth to slow to 1.8% in 2019.