If FED hikes interest rates 3 times in 2017:
1) Strengthening USD will put US exporters to disadvantage, decreasing exports and slowing US economic growth.
2) Strong USD will decrease prices of imported products, thus decreasing inflation pressure.
3) As interest expense will increase, China and other developing countries that have borrowed huge amounts of USD denominated debt will be under pressure. Because other economies are now more bigger than they were before, US itself will be under pressure if other countries economic growth slows.
4) Investment into infrastructure will cause inflation? Not that fast. It will take some time for huge infrastructure investments to happen. One year is probably just not enough for this type of projects.
USD has gone up against most major currencies. Markets are already pricing future interest rate hikes? Many are looking into the past and trying to understand what happened when the FED was hiking interest rates before. They probably miss one important point. Market never had that much amount of USD as today. So the effect of interest rate hike should not be the same as in the past. 1% increase by the FED should have bigger effect than it did some 20-30 years ago. Maybe 1% increase today is equivalent to 3% increase of the interest rates in the past.
We will see more drama next year. For sure, it will be difficult to hike interest rates for the FED alone when other economic partners are going another way.