Even as US stocks roared higher yesterday in response to the passage of the Senate tax bill, analysts were expressing scepticism about the notion that it will transform an economy already running close to full employment.

Kent Smetters, a former Bush administration official who oversees the Penn Wharton Budget Model, said he expected at most a 0.1 percentage point uplift to annual growth rates over the course of 10 years as a result of the legislation. The long-run impact on trend growth would be negligible, he added, as the extra debt amassed as a result of lost revenue weighed down on the economy. “It is not a significant boost,” he said.

Politically, there is no doubt that the passage of the package is opportune. The US has seen two successive readings of annual GDP growth running at 3 per cent or more and the Atlanta Fed’s model points to 3.5 per cent growth for the final quarter of the year.