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Yesterday the International Monetary Fund lowered its forecast for U.S. economic growth to 2.1% for 2017 (from 2.3%) and to 2.1% in 2018 (from 2.5%.) The fund had included a likely infrastructure spending bill and a tax cut/tax reform package in its earlier forecast. Now with the White House distracted by charges of Russian interference in the November 2016 election and with deep divisions between the ultra-conservative caucus and a less conservative group in the Republican party making it hard to pass any legislation, the IMF took those potential stimulus actions out of its forecast. The IMF also poured cold water on assumptions in the draft administration budget for economic growth of 3% in 2021. On the contrary the organization said U.S. growth is likely to gradually fall to a rate of 1.8% by 2020. The IMF called that the underlying potential growth rate in the U.S. economy.

But today, financial markets took heart from comments at the European Central Bank and the Bank of England that pointed toward strong global economic growth even as the Federal Reserve and potentially the Bank of England raise interest rates. Yesterday markets heard European Central Bank President Mario Draghi saying that stronger growth in the EuroZone would lead to an increase in interest rates sooner than expected. Stocks didn’t like that yesterday although the euro moved up on the talk. Today the markets have decided that they misinterpreted Draghi and that the European Central Bank isn’ thinking about doing anything to increase rates. Stocks have liked that but the euro has moved lower–exactly the opposite of yesterday’s reaction. Adding to today’s growth optimism were remarks from the Bank of England’s Mark Carney saying that the UK central bank would have to raise interest rates soon.

The Standard & Poor’s 500 index closed up 0.88% today and the NASDAQ Composite ended 1.43% higher. The big tech stocks that had sold off earlier this week moved higher with Amazon (AMZN) ahead 1.39% and Apple (AAPL) up 1.46%. Biotechnology stocks, which had sold off heavily in the retreat, were up today with the iShares NASDAQ Biotechnology ETF (IBB) rising 1.93% and individual biotech stocks such as Nektar (NKTR) climbing 3.67%.