Financial markets are godlike in their ability to shrug in the face of extreme policy shifts. The conflagrations of Donald Trump’s election and the UK Brexit vote were quickly smothered by faith in "synchronised" economic growth, low inflation and central bankers’ willingness to keep interest rates low. February’s spike in market volatility seemed finally to prove the complacent hordes wrong, only for it to nosedive once more — just as populism kept spreading. Things are unlikely to continue as they are. While predicting the return of volatility has been ultimately as futile as calling the top of history’s longest-running bull market, it seems arrogant to assume we are past the worst of the political risk. Interest rates are rising and more governments are promising short-term gains whatever the long-term cost. A bet against volatility has room to get pricier and more painful. The political consensus is changing. Forty-one percent of economic output from G20 countries plus Spain is ...

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