, Columnist
Markets Are Going to Roil Next Year
Trump, China and political populism are going to end a period of stability.
Prepare to be bounced.
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The European Central Bank reckons that financial market uncertainty, as measured by how far stocks, bonds and the euro are from historical norms, is currently close to zero, in contrast with elevated uncertainty during the recessions of 2009 and 2013:
The sheer range of known unknowns for 2017 -- the outlook for China’s economy, the effect of populism on European politics, the scattergun policy-making of president-elect Donald Trump -- makes a low level of uncertainty unlikely to persist. For each of the major financial asset classes, there are plenty of reasons to expect that price swings will become more violent next year.