Will President Trump usher in a new era of faster economic growth? Will immigration restrictions deprive the United States of the labor it needs to grow more quickly? We have had these questions for a while, and we still don’t know enough to answer them. Our near-term conclusion is that nothing will happen early enough in this administration to have a meaningful impact on growth in 2017.

This month we take a closer look at the U.S. labor market, where we see some evidence of more slack despite the tightening trend. Also, while the collision of higher inflation with stagnant wages is a problem, we see some potential for oil price weakness this year that may take the edge off inflation. Last, we consider a few points on coming changes at the world’s major central banks that could make 2018 a brave new world indeed.

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The global economy is close to firing on all cylinders, but coming changes at the world's major central banks warrant caution ahead.