How do I see the year 2018? Low growth and productivity, a declining working population, and an unsustainable rise in animal spirits. Everything comes to an end, and the longer it takes, the worse it is.
Analysts and markets alike are already discounting a 25 basis points rise in the Fed’s core rates this week. So investors’ reaction will depend largely on Janet Yellen’s message regarding future rate hikes. A vague gradualism no longer matches the kind of unequivocal commitment the markets are waiting for. Anything short of this could fuel general volatility and unrest.