Tighter policy won’t derail global recovery

The steady economic expansion in advanced economies is set to continue for the next year or two, led by rising household consumption and business investment. Although most economies are approaching full employment, inflation will probably remain subdued. The US Fed will continue to unwind QE slowly and predictably while raising rates, and the ECB is likely to taper its asset purchases gently during 2018. Prospects for emerging economies have generally improved, as Brazil and Russia have come out of recession. China’s economy is likely to slow, but only gradually.