The U.S. economy continues to be characterized by low growth, low inflation, low interest rates and low unemployment, but the landscape is likely to change in 2017. The economy grew 3.2% in the third quarter of 2016 per the first revision from the Bureau of Economic Analysis. Third quarter growth was larger than expected and well beyond growth rates in the prior three quarters. Nevertheless, the economy grew only 1.57% on a year-ago basis. The Fed is almost certain to begin a series of incremental increases in the Fed fund rates, pushing the short-term end of the yield curve up. Long-term rates are also rising as funds flow from bonds to stocks in expectation of regulatory, tax, and fiscal policy changes with the Trump administration. Inflation remains below the Fed’s 2% target for the Personal Consumption Expenditure (PCE) core index. On a year-over-year basis ending in October, the core PCE increased only 1.74%. Headline PCE inflation, which includes food and energy prices, increased only 1.41% over the same period.