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Influential Fed centrists Williams (soon to be NY Fed President) and Dallas President Kaplan last week reiterated an upbeat message for 2018 but sounded curiously cautious thereafter.  

Key Quotes:

“Kaplan cautioned that the tax boost would fade in 2019, slowing growth to 1.75%-2.0% in 2020, putting him at the lower end of the central tendency.”

“Williams did not speak to 2019 specifically but did note that the “tax cuts are front-loaded” and that optimism about r-star is misplaced, noting, “I’m conscious that the fundamental drivers that govern r-star are lower than we’ve seen in the past” (i.e. demographics, productivity growth and the demand for safe assets).”

“Against that Fed Governor Quarles has noted that tax cuts could drive  supply side  improvements and  raise r-star.”