Stable, steady growth will continue through next year and well into 2002. But lots of things could go wrong. Growth in the rest of the world is also slowing and could stall, making it harder for U.S. firms to meet their export goals. Another financial disruption, such as the Asian currency collapse of 1997-98, could bring bankruptcies and much tighter credit for businesses. The Middle East situation could deteriorate, leading to war, an oil embargo or both.
Trouble can also come in less dramatic form.
Those, along with energy costs, are already squeezing profit margins, leaving many firms with the choice of either raising prices or seeing their shares hammered on Wall Street. If their opinion of the U.S. economy were to change, the dollar could lose altitude against the yen and euro quite quickly. Who is in the White House will be important if any of that happens, of course. But it's the Fed, not the President and Congress, that can keep the economy from falling off the rails. The central bank can adjust interest rates or bank credit flows on short notice, and the effects are nearly universal.