Conventional economic wisdom holds that the record-low unemployment rate will cause employers to bid up wages, which then will be passed through to consumers in the form of higher prices, triggering rising inflation. However, convention wisdom is being shattered.
It is said ‘volatility is the price investors pay for higher returns’. We experienced remarkably tranquil markets for many months in 2017, but this year we’re also reminded ‘there is no free lunch’. The calm came to an abrupt end in the first quarter 2018 when market volatility sparked life and the S&P 500 gained or lost more than 1% on a daily basis 23 times. Markets continue to be worried about the lateness of the economic cycle, inflation, and trade war to real war concerns.
