While 2018 is shaping up to be a year of coordinated global growth, key risks that may serve as headwinds to this growth include:
- Brexit: The UK and EU still do not have a plan in place for how the UK will leave the union, and both sides appear to be far apart at the negotiating table.
- Housing in the US: The potential negative impacts of the new tax regime on homeowners (i.e., limits on the deductibility of mortgage interest and state and local taxes, including property taxes) could put pressure on home prices, especially in high-cost areas.
- Commercial Real Estate: The growth of e-commerce continues at the expense of traditional retail will likely lead to a glut of unused “brick and mortar” real estate, putting stress on the retail sector of the commercial real estate market.
- Geopolitical Events: The chance of a geopolitical event that could result in a flight to safety appears to be increasing (e.g., armed conflict or trade war).
- Slowdown in China: With Chinese growth expected to be a large contributor to global GDP, the effects of any substantial economic slowdown in China could reverberate around the world.