Back to the Fed

The midterm election is over. So we can go back to worrying about the Fed!

I ended yesterday's political economy piece saying:
My sense, here, is that a divided Congress means we are in a ride it out period economically. There are no more big fiscal plays coming on that front until after 2020. Going forward, the economy, is, therefore mostly about momentum and the Fed.
So let's discuss this for a bit.
Global growth is slowing
The question is not whether global growth is slowing. It is whether that slowdown will fully encompass the US. If you look at predictive econometric models, I like what Gavyn Davies has shown over the past business cycle. So let me quote from his latest at the FT. Here's how he starts:
The drop in global equities in October was remarkable for its extent, the frequenc...


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