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Key Private Bank’s Investment Management Team follows a rigorous and disciplined process as we evaluate markets and manage client portfolios.

Our quarterly newsletter highlights our research and strategy teams’ current thinking on the most important trends likely to shape the market behavior and serves as a foundation for constructing client portfolios. Inside you’ll find greater detail on our market, equity, and fixed-income outlook.

Executive Summary

We Expect Interest Rates to Rise Modestly Over the Remainder of 2018

We expect two additional Federal Reserve rate hikes this year.

Aging Economic Cycle

Although the economic cycle is clearly aging, economic growth remains strong and should continue for much of the next year.

Tax Cuts and Jobs Act (TCJA) Dramatically Improved Profitability

The newly passed tax act has dramatically improved profitability for many U.S. companies.

While the change will not necessarily alter long-term earnings growth, there will be a surge of earnings growth this year.

Trade War Heats Up

We expect volatility in the markets to remain elevated as the U.S. and China publicly negotiate trade.

However, We Believe the Strong Macro and Fundamentals Will Eventually Prevail

The markets appear to be overreacting. The positives that continue to underpin the bullish thesis include solid global growth, positive domestic activity driving corporate earnings growth, capital spending improvement, and real household median incomes jumping with strong employment.

Disclosures

Any opinions, projections or recommendations contained herein are subject to change without notice and are not intended as individual investment advice.

Investment products are:

NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY