Credit Suisse sees another 7 percent more to go for US rally as Trump's policies unleash inflation

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Credit Suisse's global equity strategy team led by Andrew Garthwaite sees the rising 7 percent to 2,350 by midyear 2017, up from a previous midyear forecast of 2,200, as the Donald Trump-led government takes over the task of stimulating the economy from the Federal Reserve and defensive-oriented investors race to catch up with the new paradigm.

"The key positive for 2017, in our judgement, is that investors are overweight deflation hedges (i.e. bonds) relative to inflation hedges (equities) at a time when policymakers are moving away from NIRP towards fiscal stimulus, and inflation expectations are set to continue rising," the report says.

"Other supportive factors are: earnings revisions at a five-year high; a still reasonably elevated equity risk premium; excess liquidity; and rising economic momentum."

But like Goldman Sachs, Credit Suisse sees a slight pullback in the second half of the year with the S&P 500 ending 2017 at 2,300.