Q4 2017: Tax Reform and the Fed
Decent growth and modest inflation continued in the fourth quarter. With growth on solid footing, investors focused on tax reform and the selection of a Fed Chairman. Stocks boomed. A 6% quarterly rise is unusual outside V-shaped recoveries. The Q1-12 rise was bigger, but it followed back-to-back declines on recession fears related to the fiscal cliff. In contrast, this year’s fourth quarter bonanza followed solid increases in Q2 and Q3.