Although we expect a deceleration, the long economic expansion should continue through 2019.
Central banks have pushed any attempt to “normalize" interest rates at least into the second half, putting this theme on hold.
We expect to see some cost pressures emerge this year on the labour front, lifting overall inflation modestly, while we expect rates to slowly retrace some of the drop experienced late in 2018 and early this year.
Although earnings growth will slow from 2018's pace, equity prices are not unreasonable given the low-inflation environment. Improvements in earnings later this year should help to support equity prices.
Volatility returned to the market with a vengeance in 2018, and we expect to see more of these episodes going forward. There are plenty of geopolitical uncertainties ahead, with the potential to bring good or bad news as they unfold.
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