April 12, 2018 // Boston, MA – Investors and economists are expressing increasingly divergent opinions about the direction of markets and the economy, as they struggle to evaluate the looming risks of softening growth, rising inflation, and emerging trade conflict. In our last Outlook, we noted that the tax reform plan would clearly increase corporate earnings, but we questioned whether it would have any significant effect on broader economic growth. In January, investors enthusiastically incorporated early information about tax-related earnings increases, driving up U.S. stock prices and elevating valuations. By the end of January, these tax-related earnings boosts were fully incorporated, and investors turned their attention to potential risks. These risks include the expansionary budget bill passed when the economy is already at full employment, and the impact this may have on future inflation and interest rates.