Trump plans could see Fed hike rates five times in 2017 and 2018, Morgan Stanley says

President-elect Donald Trump, a self-proclaimed 'deal-maker', and the realities of turning proposals into law, means that the most likely scenario is not that his policy agenda will be adopted 'as is', Morgan Stanley said.

In the opinion of the bank's analysts, the measures which stood the best chance of being carried out were a comprehensive tax reform, infrastructure spending, and trade protectionism.

Morgan Stanley mapped out scenarios for each of those three policies ranging from an 'incrementalist' approach to a more 'transformative' one.

Their main conclusion is that the results of all the possible combinations ranged from "little measurable impact" on the economy to a slowdown in activity to significantly below 'stall speed'.

Nonetheless, in their opinion the most likely scenario was likely to lie somewhere in the middle, with trade protectionism going little further than strong rhetoric but with Trump delivering "measurable" tax reform and infrastructure spending.

On net, that policy combination would boost the rate of growth in gross domestic product by three tenths of a percentage point in 2017 and 2018 alongside two rate hikes from the US central bank in 2017 followed by another three in 2018, Morgan Stanley said.

As of 1430 GMT the yield on the benchmark 10-year US Treasury note was up by eight basis points to 2.23%.