Some members of the Federal Reserve aren't so sure the Trump boom is on its way.
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The Fed isn't sure if Trump can deliver on his economic promises
Half of the Fed officials didn't even factor economic stimulus into their projections due to uncertainty, according to the March minutes.
President Donald Trump and Fed Board Chair Janet Yellen.
In the release of the minutes for the Fed's March meeting, the members of the Federal Open Markets Committee discussed the possibility that a large fiscal stimulus driven by President Donald Trump and his administration would kick-start to the United States' economy.
Trump has promised to return the US to sustained 4% annual GDP growth (which he recently downgraded to a 3% target), slash taxes significantly, invest $1 trillion in infrastructure, expand job opportunities, and more.
However, the Fed doesn't believe that Trump will be able to get results this year. In fact, the uncertainty over Trump passing his reforms is so high that many members haven't even factored a Trump stimulus into their forecasts for the economy.
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From the minutes (emphasis ours):
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The statement comes at a time when the uncertainty of Trump's ability to follow through on his economic promises is growing. The stocks that would benefit most from Trump's plan to cut taxes have been lagging after efforts to get his healthcare reform bill stalled.
Additionally, after soaring following the election, positive sentiment surrounding the economy has stabilized, and recent "hard data" releases showed that actual economic activity is not keeping up with the sentiment boost.
Interestingly, some members of the Fed also noted that seemingly non-economic policies that Trump has thrown around could end up weighing on economic activity.
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