2018 will be as good as it gets

It is hard to see how the US economy could have a bad year in 2018. GDP growth has been gaining momentum in 2017, the global economy is experiencing a strong synchronised upswing, borrowing costs remain low, the dollar has been trending lower and, despite the low unemployment rate, inflation and wage growth have not picked up. Now Congress is about to add fiscal stimulus to that already considerable list of positive factors. While GDP growth should be a healthy 2.5% in 2018, however, we anticipate a cyclical slowdown to only 1.7% in 2019, as the boost from the fiscal stimulus wanes and the cumulative monetary tightening begins to bite.