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VOL. 41 | NO. 49 | Friday, December 8, 2017
Fed sees 'modest lift' to growth from tax cuts
WASHINGTON (AP) — Federal Reserve Chair Janet Yellen says that she and her colleagues expect a "modest lift" to economic growth from the tax cuts being proposed by President Donald Trump and Republican lawmakers.
Yellen said at a news conference the likelihood of lower taxes is why Fed officials expect the economy to grow at 2.5 percent in 2018. But growth would then slip back closer to its recent 2 percent average.
She said the potential for greater consumer spending and capital investments from tax cuts have been reflected in part by rising stock prices.
Yellen cautioned, however, that there is "considerable uncertainty" about the impact of the tax cuts, which are estimated to add at least $1 trillion to the national debt over the next decade. She noted that any wage growth would likely stem from the low unemployment rate, rather than the tax cuts.