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Do not go gentle into that good night

| Posted by: Paul Donovan | Tags: Paul Donovan Weekly

  • For economists, the end of the year is often a gentle wind down. This is not the case in 2017.
  • The dullest event is the US Federal Reserve meeting (13 December). The Fed has basically told markets that there will be a 0.25% rate increase. Markets, for once, have listened. This is not going to surprise.
  • The US tax reform soap opera has more potential for drama. Negotiations in the Senate, and between the Senate and the House risk adding uncertainty. A deal is likely to be done, but it may not come until 2018. The Alabama special election for the Senate (12 December) adds to the political noise.
  • There is the EU heads of government summit (14 and 15 December). This is a key moment in the tedious talks about the UK's exit. If the summit fails to progress to trade talks, the risks of a "no deal" exit increase. Markets have ignored those risks so far.
  • China has the central economic work conference, which is likely to give more policy signals. North Korea remains defiant. The Bank of Japan meets (21 December) with talk policy may change in 2018.
  • This is not a gentle wind down.