Outlook for Financial Markets
“The key to good decision making is not knowledge. It is understanding.”
– Malcolm Gladwell
- The Tax Policy Center estimates that the middle household income quintile will benefit by over $900 per year from the tax cuts. Given that the savings rate in the U.S. is now around 3%, that’s a sizeable bump in extra spending money that consumers will have available starting in February.
- Economists are largely in agreement that corporate tax cuts will pull forward growth in the U.S. and that the long-term 2% trend is essentially intact, notwithstanding a few years of stimulus-driven ramp up.
- While the volatility seen in the first weeks of February was extraordinary, the difference between short-term corrections and more concerning developments is often gleaned from high-yield corporate bond spreads, which remain tight by broad historical standards and consistent with other periods of stable economic growth.
- The U.S. economic momentum is palpable. Not throbbing as in 1999, but a strong and quickening beat as in 1997 or early 1998.
Download and read the March Outlook for Financial Markets to know more.