Having laid down our expectations for the World economy in 2018, in this note we describe a number of potential surprises to the outlook. The usual suspects, or ‘known unknowns’, include a larger-than-expected fiscal boost from US tax cuts, (geo-)political risks, economic policy mistakes, inflation surprises, a financial bubble burst, or a Minsky moment in China, to name a few. We chose to include some of the...
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Having set out our expectations for the global economy in 2018, we add here a number of potential surprises. None of them are included in our baseline projections.In the US, we include first a ‘Texas boom’ due to rising oil prices. US oil investment could see a major uptick and Texas could accelerate, in turn lifting US growth.Secondly, we include a hawkish shift at the Fed. While Trump has preferred continuity in the Fed’s leadership with his nominee as Fed Chair, Jerome Powell, he could...
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