Two economic experts recently warned CNBC that the U.S. economy faces the risk of over-heating because of the amount of fiscal stimulus sparked by the sweeping tax cuts engineered by President Donald Trump.
On the other side of the argument, market bulls are finding comfort in sound economic fundamentals and sticking to a familiar script: As long as there are gradual rate hikes, the "Goldilocks" growth story stays intact and earnings remain robust.
"The tax cuts were badly timed, adding stimulus to an economy that didn't really need it,” Jeremy Lawson, chief economist at Aberdeen Standard Investments told CNBC.
“The impulse from this spending bill is likely to be even larger for the economy than the tax cuts because the multipliers are significantly larger," he told CNBC.
"This complicates the job for the Fed because it starts to threaten the idea that they can withdraw policy accommodation gradually," Lawson warned.
Others agree with Lawson.
"There is real fear here that, given the amount of fiscal stimulus that's been put in place, which the U.S. economy is already doing very well, there could be overheating risk," Sim Moh Siong, currency strategist at Bank of Singapore, told CNBC on Monday.
"If you look at the medium-term picture there is growing concern about twin deficits," he added.
But other experts are much more optimistic.
Economic guru Larry Kudlow contends that America now the “best country” for business in wake of the sweeping tax cuts engineered by President Donald Trump.
He praised the United States’ economy following the tax cuts and proclaimed the country now the “best” for business.
“We are on the front end of an investment boom that’s largely tied to the tax cuts,” Kudlow told New York AM 970 radio’s John Catsimatidis on “The Cats Roundtable.
“[It] will be stronger than anything we’ve seen in probably 25 years,” the former Ronald Reagan adviser told Catsimatidis.
“America is once again becoming the best investment environment in the world — the best country in which to do business. And that’s a powerful positive,” said Kudlow, a Newsmax Finance Insider and CNBC senior contributor.
For his part, Trump has taken to Twitter to defend his accomplishments. He often has said that the mainstream news media only reports "fake news" and twists the facts.
"So many positive things going on for the U.S.A. and the Fake News Media just doesn’t want to go there. Same negative stories over and over again! No wonder the People no longer trust the media, whose approval ratings are correctly at their lowest levels in history!" Trump recently tweeted.
On the same day, Trump also used data to tout the economic benefits of his tax cut.
"4.2 million hard working Americans have already received a large Bonus and/or Pay Increase because of our recently Passed Tax Cut & Jobs Bill....and it will only get better! We are far ahead of schedule," he tweeted.
(Newsmax wire services contributed to this report).
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