Capital Advisors Group distributed a paper entitled, "Trumponomics, Debt Ceiling Rollercoaster and Geopolitics: Three Trends to Watch in 2017." Written by Lance Pan, its "​Abstract" explains, "We select Trumponomics, the debt ceiling rollercoaster and geopolitics as three main themes to watch in 2017. Federal stimulus may in fact be underwhelming and a stronger dollar and trade wars may further erode the effect of increased government spending. The immense size of government money market funds ($​2.​2 trillion) may present challenges throughout the upcoming debt ceiling rollercoaster ride. 2017 may also bring multiple geopolitical risks from various parts of the world. Longer duration, higher credit quality and increased liquidity are advised for cash portfolio construction." The piece tells us, "The new administration'​s economic initiatives may impact short-​term debt markets on both the interest rate and credit fronts. Short-​term rates were expected to move higher regardless of the presidential election outcome. Following the Fed'​s rate hike last December, the market currently expects two to three more hikes in 2017. Quick nominations of the two vacant seats on the Federal Reserve Board may tilt the central bank'​s bias to a more aggressive Fed, but more than three rate hikes in 2017 is unlikely unless there are clear signals that the economy is rapidly overheating. Longer-​term interest rates, on the other hand, remain a wild card."

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