"Investors can get behind pro-growth policies and can't and won't support protectionist policies," Art Hogan, chief market strategist at Wunderlich Securities, said in response to the survey. "Trade wars, like all wars, end negatively for all."

Protectionism is seen as the No. 1 threat to U.S. expansion by 51 percent of respondents, almost double the percentage from the December survey and the first time in the survey's history that any single concern has been expressed by a majority. It eclipses the 44 percent who were worried about global economic weakness early in 2016 — concerns that sent markets into a nosedive.

Concern about protectionism from President Donald Trump is clouding the outlook on Wall Street, with respondents to the January CNBC Fed Survey saying trade policies could overshadow the effects of the administration's pro-growth plans.

The contrast between respondents' views on trade and other economic policies of Trump is stark. Seventy-five to 95 percent of participants, who include economists, fund managers and strategists, have positive views of Trump's plans to cut individual and business taxes and deregulate the economy. But 83 percent have negative views of his trade agenda.

"Trashing the Mexican economy with tariffs and other bad policies is like throwing rocks through your neighbors' windows, thereby reducing the value of YOUR home," wrote Robert Fry, chief economist at Robert Fry Economics.

Indeed, 58 percent say Trump's relations with Mexico will lead to less growth for both countries and 53 percent say the same about China. And respondents believe overwhelmingly that China, Mexico, Canada and Japan will retaliate if the U.S. imposes import tariffs on those countries.

Robert Brusca, chief economist at Fact and Opinion Economics, was one of the few to see any upside in Trump's trade policies. He said they were a "danger but an investment in the future." Brusca sees the global trade system as unfair to the U.S. "We have not had the benefits of free trade, and we have less to lose from this Trump gambit than most people think," he said. "I suspect Trump wants leverage more than tariffs."

Respondents say the possibility of protectionism is confusing forecasts for both growth and monetary policy. "It will be very difficult for the FOMC to gauge the impact of any rate increases with the possibility of simultaneous protectionist trade policies and large deficit spending,'' said John Donaldson, director of fixed income at Haverford Trust.





That may be one reason why growth forecasts are far from the 4 percent Trump suggested his policies could ignite. Respondents on average see growth rising 2.5 percent in 2017 and 2.75 percent in 2018. Both estimates are higher than before the election but only about 25 basis points for this year and 40 basis points for next year.

"The president is very hard to handicap, and I don't really know how much he can get done when Congress must be dealt with to make the kind of sweeping changes he proposes," said Kevin Giddis, head of fixed income capital markets at Raymond James Financial. "While the trend for interest rates is up, I wouldn't be surprised if something happens or doesn't happen that could turn the cart on its head."

But most do not see a recession. The probability of the U.S. entering a recession remains at a low level of 18.5 percent.

When it comes to Fed rate hikes in 2017, three looks to be the charm.