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It’s hard to make an argument that the economy wasn’t already doing well or that corporate tax cuts are somehow going to be a short term negative.
Market’s are predictive mechanisms and I probably won’t see the next recession coming before the market does. The yield curve has flattened but hasn’t inverted and if the tax cuts unsupported by spending cuts doesn’t send the long end higher, nothing will.
Inversion is an incontrovertible signal of a recession that I don’t think you’ll see any sign of in 2018. The Fed is more likely to be playing catch up with this economy than inhibiting it in any fashion. Which means there should be clear sailing through at least the 1st half.
I will say that the higher this market goes without any significant correction, the harder the ultimate landing is going to be. But it’ll probably still punch me in the face before I know it’s there.
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