Private sector economists and market strategists are much more optimistic than government forecasters when it comes to the prospect of tax cuts generating economic growth.
CNBC’s Fed Survey asked 44 Fed watchers–including money managers, strategists, and economists–about the tax cuts. On average, respondents see tax cuts boosting growth by roughly half a percentage point this year, next year, and by a similar amount over the next decade.
That would put growth much closer to the Trump administration’s projected growth of 2.9 percent than the forecast of the Joint Committee on Taxation, Congresss’s nonpartisan scorekeeper for tax bills. Its’ analysis projected that tax cuts would add less than a 10th of a percentage point each year.
The respondents are also very confident tax reform will be passed by Congress. Just over 70 percent think the tax cuts will pass this year, with another 25 percent or so saying that it will pass next month.