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Expectations are high for the U.S. economy as we begin 2017. A strong showing by the stock market and surging optimism among both businesses and consumers form the basis for what many expect will be a much better year for the economy. This likely improvement would follow an undistinguished 2016, in which growth probably fell short of 2%.

Good, but not a terribly exciting labor market report. Although jobs fell 19k short of expectations (26k short on private payrolls), that shortfall was exactly offset by the 19k upward revision of the previous two months. The participation rate and unemployment rate both ticked up one tenth, the latter rising to 4.7%.

The old year ended with its share of hits and misses for the economy. On point, there was an upward revision, from 3.2% to 3.5%, in gross domestic product growth during the third quarter, as well as gains in the sale of both new and existing homes, a solid increase in consumer confidence, and a small rise in consumer spending.

Although the market won’t break 20,000 this year, 2016 has been quite a ride. In the third week of January I was speaker at the annual ETF Conference held in Ft. Lauderdale that attracts over a 1000 advisors and money managers. The bearishness was stifling.

A year ago, we were looking back on the 2015 equity market, which like its predecessor had been relatively unimposing—at least in terms of the Dow Jones Industrial Average and the smaller indexes.

Although in modern times you can find markets open almost 24/7, trading around holidays has actually slowed in recent years. This year many have started that Christmas holidays early, leaving town last night. The markets have lost their momentum as interest turns to family, friends, and holiday dinners.

The Federal Reserve continues to maintain a relatively transparent monetary policy. So, after months of expressing assorted concerns about the health of the economic up cycle, and holding interest rates unchanged as a result, a now more confident lead bank—which has been upfront recently in putting forth its evolving economic views—has opted to raise interest rates

The Fed’s actions were perfectly predictable last Wednesday, yet the rate projections did not jibe with the forecast changes. Certainly the Fed hiked 25 bps (no surprise), and the vote was unanimous: no holdouts by the doves or 50 bp advocates among the hawks. The projections of future funds rate were, as expected, far more aggressive.

The current jobs picture would seem to have something for almost everyone. On point, those looking for further modest growth were cheered by November’s in-line gain of 178,000 positions, which was on par with this year’s average monthly increase of 180,000 jobs.

Donald Trump’s surprise victory may radically alter the future path of U.S. monetary policy. Yields on long-term Treasury bonds have jumped by more than one-half percentage point since the election. In addition, the markets are pricing in possibly two or three interest rate hikes by the Federal Reserve in 2017.