The First 100 Days

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22. Policy Shift: Mars & Venus Trump Fiscal Easing US Fiscal Deficit (% of GDP) 4% Reagan Bush Clinton Bush Obama Trump 2% 20% Yellen Monetary Tightening Volcker Greenspan Bernanke Yellen Reagan Bush Clinton Bush Obama Trump 0% -2% Baseline (-3.3%) 15% -4% -6% 10% Unemployment -8% -10% Trump Tax Plan (-5.3%) 5% Fed Funds Fed Projections -12% 1980 2000 2020 0% 1980 2000 2020 You May Not Know: The relative strength of Trump’s fiscal easing and Yellen’s monetary tightening will be a critical dynamic for global markets in 2017. With US economic numbers strong, and the new administration active in the first 100 days, look for a Fed that steps beyond a highly sensitive approach to data releases. While Yellen remains decidedly dovish, the Fed may become more strategic in 2017 with the potential to tighten more rapidly than markets expect. Deutsche Bank Source: Wall Street Journal. Congressional Budget Office. Federal Reserve. DB Global Markets Research. Financial Times (Mohamed El-Erian). Bloomberg. Data as of Dec 31, 2016. 43
23. ObamaCare Repeal & Replace % of total population 15% 10% Total Expenditures ($, Bn) 400 300 200 100 14% Uninsured Americans Represents 18mm newly insured people US Medicaid Spending ObamaCare expanded Medicaid in 31 States (10mm people) 0 1975 1985 1995 2005 9% 5% 2008 2009 2010 2011 2012 2013 2014 2015 $397Bn Expectations Under President Trump Step #1: “Repeal” ObamaCare Tax & Spending Provisions Timing: Jan – Feb 2017 Possible Guidepost: HR 3762, passed by Congress in Dec 2015 (“Restoring Americans Healthcare Freedom Reconciliation Act”) • Repeal $1.3 trillion of ACA spending (over 10 years) • Repeal $1.1 trillion of ACA taxes (over 10 years) Step #2: “Replace” ObamaCare Timing: Unclear (could be 1-3 years) Possible Guidepost: GOP’s “Better Way” (only a 37 page blueprint) • Promotes HSAs • Caps employer-based health insurance exclusion • Permits sale of insurance across state lines • High risk pools and other insurance market reforms • Medicaid and Medicare reforms You May Not Know: Repealing ObamaCare tax and spending provisions is the #1 priority of the GOP in 2017. The path to replace is less clear, could be 1-3 years, and remains a concern for many GOP leaders. While Republicans will seek to shift from an open-ended defined benefit structure, to a more cost-mitigating defined contribution scheme, the bridge to replace poses enormous political risks. In 2016 alone, subsidies to consumers and health plans totaled $43 bn as nearly 20mm Americans have added insurance since 2010. Deutsche Bank 1/4/2017 Source: Peck, Madigan, Jones. Centers for Medicaid and Medicare Services. Gallup-Healthways Well-Being Index. New York Times. U.S. Census Bureau, Current Population Survey, 2014, 2015, and 2016. Medicaid spending data adjusted for 2010 inflation. 44
Page 1 and 2: Deutsche Bank The First 100 Days Gl
Page 3 and 4: The First 100 Days I. Globalization
Page 5 and 6: Globalization Pushback & Market Reg
Page 7 and 8: Introduction "A Black Swan is an ev
Page 9 and 10: 2016 Global Market Performance Glob
Page 11 and 12: 2016: Another Record-Breaking Year
Page 13 and 14: Key Market Themes for 2017 Politics
Page 15 and 16: Global Market Outlook for 2017 US R
Page 17 and 18: Deutsche Bank I. Globalization Head
Page 19 and 20: 1. Weak Post GFC Recovery Global GD
Page 21 and 22: 3. Cross-Border Lending & Spending
Page 23 and 24: 5. Climate Change Population (bn) 8
Page 25 and 26: 1/4/2017 7. Rising Global Debt Debt
Page 27 and 28: 9. Brexit’s Long Road GBP / USD 1
Page 29 and 30: Deutsche Bank II. Power & Process
Page 31 and 32: 11. Domestic Policy Team Cabinet: P
Page 33 and 34: 13. Economic Policy Team Cabinet-le
Page 35 and 36: 15. Congress & the Agenda Key Polic
Page 37 and 38: 1/4/2017 17. Democrats’ Diminishi
Page 39 and 40: 1/4/2017 19. Channeling Populism 20
Page 41 and 42: Deutsche Bank III. Policy Prioritie
Page 43: 1/4/2017 21. Legislative Priorities
Page 47 and 48: 1/4/2017 25. Infrastructure Spendin
Page 49 and 50: 1/4/2017 27. Tough on Trade 40% 30%
Page 51 and 52: 1/4/2017 29. US Energy Independence
Page 53 and 54: Deutsche Bank IV. Comprehensive US
Page 55 and 56: 31. Backdrop: Dysfunction Junction
Page 57 and 58: 33. The Path 2 Budget Reconciliatio
Page 59 and 60: 35. The Math Non-Gov’t Scoring of
Page 61 and 62: 37. Border-Adjusted Taxes G7 Tax Sy
Page 63 and 64: 38. Corporate Tax Reform (Cont’d)
Page 65 and 66: 40. Individual Tax Reform Comprehen
Page 67 and 68: Deutsche Bank V. 2017 Outlook & Imp
Page 69 and 70: 1/4/2017 41. Make Growth Great Agai
Page 71 and 72: 43. Market Regime Change End of the
Page 73 and 74: 45. Equity Earnings Revival 20% 15%
Page 75 and 76: 47. Rates Paradigm Shift Post Elect
Page 77 and 78: BRL RUB ZAR COP CLP IDR PEN TWD ILS
Page 79 and 80: 50. Supply-Driven Oil Market OPEC G
Page 81 and 82: The Year the Music Died “I don’
Page 83 and 84: The Written Word “It’s always e
Page 85 and 86: Legends of Sport “Only a man who
Page 87 and 88: DB Forecasts GDP Growth (%) 2017 20
Page 89 and 90: DB Forecasts US Treasury Rates Rate
Page 91 and 92: Deutsche Bank Appendix B: 2017 Forw
Page 93 and 94: February Key Events • Feb 2: BoE
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April Key Events • Apr 3: US NCAA
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June Key Events • Jun 2: US month
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August Key Events • Aug 3: BoE Mo
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October Key Events • Oct 1: US 20
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December Key Events • Dec 5: Euro
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President Obama’s Executive Order
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Page 113 and 114:
Disclaimer The information herein i
Page 115 and 116:
Reader’s Notes Deutsche Bank 114
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