On average, economists marked up their growth forecasts. The economy could expand 2.2% in 2017 and 2.3% in 2018, as a fiscal stimulus kicks into gear, up from about 1.5% over the past 12 months. Inflation is seen at 2.2% next year and 2.4% in 2018. If correct, it would be the first stretch of sustained inflation above 2% since before the recession of 2007 to 2009.


Budget battles [under Obama] frequently lasted until the 11th hour, stoking fears that U.S. Treasury bonds could go unpaid. In 2013, the battles shut down the government for more than two weeks. "Now that Republicans are in control, there's no concern about debt and deficits," said Steven Blitz, chief economist at Pangea Market Advisory. Earlier this year, Mr. Blitz feared the economy could easily tip into recession but said a combination of tax cuts and rising spending would reduce that risk.

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