Growth in developed economies has risen above trend, and unemployment rates continue to fall. The eurozone looks set to lead this expansion in developed markets. In the US, however, growth is expected to moderate slightly in the third quarter on the back of hurricanes Harvey and Irma. Notwithstanding declining investment, shaky politics and policy uncertainty, growth in emerging markets is tracking 5% this year. While deflationary risks have subsided, inflation risks have yet to appear. As a result, the Fed can continue to raise interest rates gradually while starting to slowly unwind its balance sheet into 2018. The European Central Bank and Bank of Japan have the luxury of contemplating when they will start their policy normalisation - for now, however, monetary policy remains accommodative. In addition, the outlook for most emerging-market economies remains positive as commodity prices hold their own and credit conditions improve. Strong global growth and low inflation, coupled w...
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