It is important to understand that everything has really become different

To predict coming developments in economies and financial markets, it is crucial to understand the major changes that have appeared in the functioning of OECD countries’ economies: Low labour cost growth, and therefore a low level of core inflation at the end of the expansion phase, despite the pressure on the labour market; Persistently low interest rates at the end of the expansion period, due to the low level of inflation; High corporate profitability being maintained at the end of the expansion due to the small increases in labour costs and the low level of interest rates; Continued strong solvency among public and private borrowers, thanks to the low level of interest rates; The appearance of short oil price and inflation cycles due to the dynamics of shale oil production in the United States. The main consequences of these major changes are: No recession caused by rising interest rates or declining corporate profits and solvency; No deterioration in companies’ fundamentals at the end of the expansion period; No credit cycle or debt crises; Fluctuation in inflation and growth.