Coming before a prolonged holiday week in the U.S., we suspect that this may be the least read of any post appearing on Political Calculations during 2017, but we'd like to knock it out before we go on our own year-end holiday, where we have just one more post after this one to present in 2017, in which we'll reveal the biggest math story of the year that was!
Week 3 of December 2017 is when the Tax Cuts and jobs Act of 2017 officially became law, with President Trump signing the measure on Friday, 22 December 2017. Based on Federal Funds Rate futures, we believe that investors are currently mostly focusing on the first quarter in setting stock prices, where options speculators are betting that the Federal Reserve will act to boost short term interest rates in the U.S. again shortly before the end of that quarter.
That's not necessarily a bad speculation, where a number of U.S. firms have already announced that they will use the opportunity of the tax cut to increase the pay of their employees, whether through bigger paychecks or through bonuses.
