The Macro Report | October 2017

Harmonious growth in a discordant world


Against a backdrop of continued political challenges around the world, the global economy continues to do well and markets seem more encouraged by the growth than they are disconcerted by the political volatility. We are a little more optimistic about the outlook. Regarding politics, the re-emergence of Spanish risk is one indication of the resilience of the nationalist impulse, and it’s hard to be optimistic about the prospects for growth-enhancing tax reform in the United States, though tax cuts are a different story.

At the same time, we are seeing signs of some risks easing. In particular, the Trump administration has made decent progress in thinking about the Fed and its leadership, and the individuals named on the short list, apparently now on Trump’s desk, are almost without exception well qualified. The risk of appointing an outsider who might try to change Fed policy dramatically seems a lot lower now. Some of the names lean hawkish, but any of them would run the Fed in the manner to which we have become accustomed.


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Against a backdrop of continued political challenges around the world, the global economy continues to do well and markets seem more encouraged by the growth than they are disconcerted by the political volatility.