Optimism has peaked, according to two widely followed measures of US economic sentiment. Meanwhile, the Federal Reserve's index of the public's uncertainty about the outlook for monetary policy is climbing after reaching a three-year low in November.Though the economy remains strong, unbounded enthusiasm has run too far, according to Canaccord Genuity Inc.'s Tony Dwyer. Reality will catch up to interrupt the widespread investor optimism and strong bullish trends imbuing nearly every corner of financial markets, he said. From each peak to the corresponding trough, 10-year yields on average dropped 1.11 percentage points over the next seven months, according to data compiled by Canaccord. When factoring in the consequences of tax cuts and increasingly hawkish policy from other central banks, uncertainly is likely to increase, fueling volatility in US stocks , he said.

Source: Economic Times January 25, 2018 03:56 UTC