2. RISKS TO THE GLOBAL ECONOMIC OUTLOOK A. US policy uncertainty due to new fiscal and trade policy 7  In the final months of 2016, financial markets responded to Donald Trump’s election in textbook fashion - not only at asset class level, with upward movements in stocks and government bond yields, but also within asset classes.
Markets were responding to prospects for higher growth, inflation and market inflows following the US presidentelect’s policy announcements on deregulation, tax reform and spending on infrastructure. Even more impressive, this occurred in a remarkably orderly fashion, with little evidence of distress among investors.