While we believe the shutdown on its own would have only a modest impact on growth, the combined impact of this and other short-term drags on the economy could slow first-quarter growth close to the zero mark.

In our outlook for 2019, we believe politics and policy out of Washington will continue to drive – and in some cases, weigh on – markets, much like they did in 2018.

We believe the Fed is right to be cautious in the face of rising global economic risks.

Five key macro debates are likely to shape the economic and market outlook for 2019.

We continue to view one to two policy rate hikes in 2019 as more likely.

We believe markets are now broadly priced for an extended period of the status quo – where the current impasse remains, but the UK remains in the EU.

Will the ECB have sufficient firepower – and support from the population – to spur the economy when the next recession arrives?

The OPEC agreement seeks to limit the market imbalance and stem the recent price decline while not driving prices substantially higher.

Investors can find pockets of opportunity within emerging markets despite the uncertainties facing this set of countries.

With unemployment low and the U.S. economy enjoying a fiscal “sugar rush,” we think the odds of successfully engineering an inflation overshoot look pretty good – and that is pretty rare.

Markets may have taken Fed Chairman Powell’s speech as a sign that the risks of central bank overtightening have receded, but we wouldn’t over-interpret Powell’s message to suggest that he is ignoring the risks of the economy overheating.

A plan to cancel the new Mexico City airport highlights the risk that President-elect Andrés Manuel López Obrador may implement some of his more costly campaign promises.

Core goods inflation was softer outside of used cars, and evidence was mixed that the recent Chinese import duty hikes are affecting consumer price inflation.

We expect volatility, along with a potential rise in UK sovereign yields and strengthening of the pound.

Financial media and investors have been focusing on the BBB segment of the U.S. investment grade (IG) corporate bond market this year. Careful credit selection and active portfolio management are crucial to managing risks and seeking returns in this large market segment.

Asian exporters could get hit.

While divided governments have generally been decent for markets, we think a defensive portfolio posture is prudent.