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Trump's economic plans on tax cuts and infrastructure investment


11-30-2016 00:21 BJT

The OECD secretary-general has weighed in on US President-elect Donald Trump's economic plans, which feature tax cuts and more spending on infrastructure. Let's hear what he has to say.

"The signals emitted so far point towards a somewhat inflationary stance. And, by the way, they happened to be consistent with what we have been saying for two years. Reduction in taxes but also increase in infrastructure investment. Today, in the markets, there is an expectation, that if this mix is actually practiced, if it happens, if it becomes real, there will be an increase in economic activity. And already the bonds, especially the medium to long term bonds, are dropping in value and the yields are increasing."said Angel Gurria,Oecd secretary-general.

The incoming Trump administration plans to boost US economic growth to 3 percent by 2018. The OECD expects inflation will increase to 2-point-2 percent in 2018 from 1-point-2 percent in 2016, as labor markets tighten and wages rise.

This is expected to push the US Federal Reserve to raise interest rates gradually to 2 percent by end-2018.

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