The economic expansion has accelerated this year, largely due to economic stimulus from tax reform, and will likely remain strong going into 2019. The impact of tax reform will fade eventually, and continued economic growth above 3% will require stronger capital investment, a more favorable trade environment and higher productivity. Longer term, we expect normalized economic growth of 2% or less due to numerous headwinds, including weak productivity growth, unfavorable labor force dynamics, and increasing debt levels.

Although we do not see any indication of recession in the near term, we know how business cycles work and eventually there will be another recession. No one, including the Federal Reserve Bank with all of its resources, is able to predict when the next recession will occur.

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