Donald Trump’s narrow presidential victory, Brexit and stronger nationalist tendencies in Europe and Asia indicate an underlying shift in the emphasis of consumers and government policy.

While it may continue to cause some volatility, the shift will benefit economic growth through a few key changes in behavior:

  • Greater consumer optimism fuels increased consumption
  • Expansionary fiscal policies support infrastructure projects
  • Regulatory reform increases potential business investment

Economic trends show this transition is already in motion. Research originally conducted by MSCI and updated by CLS separates economic regimes into the four different quadrants seen in the chart below. This chart shows the global economy has moved from the slow-growth quadrant to the heating-up quadrant. The heating-up quadrant is associated with stronger economic growth and increasing inflation.

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