Voya 2017 Forecast – A New Path: The Growth and Reflation Trade

Voya 2017 Global Forecast

Recap: Pro-growth fiscal policies, business-friendly policies will support higher growth, increased pricing power and a boon to global businesses. 2017 risks: Trump execution risk, trade war, EU instability, inflation overshoot, runaway rise of US dollar

  • A surprise outcome in the U.S. elections ushered in a new path forward, and markets worldwide celebrated the promise of pro-growth economic policies with rising asset prices and rising bond yields
  • In effect, the markets took the reins from the central banks, clarifying the likely path toward rate normalization — reflation — and away from unconventional monetary stimulus
  • The prospect of business-friendly policies also supported a corporate earnings turnaround — potentially higher growth, increased pricing power and higher after-tax net income — a boon to global business
  • The paradigm shift will provide unexpected returns — and risks — that may create both positive and negative extremes, making a case for broad global diversification

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