by Calculated Risk on 5/13/2018 08:01:00 AM

A brief excerpts from a research note by Goldman Sachs chief economist Jan Hatzius:

"The environment for investors is less pleasant than last year. Although growth is strong, corporate earnings have been on a tear, and both inflation and interest rates remain historically low, all of these tailwinds are abating at the margin. Perhaps more fundamentally, if financial conditions need to tighten to limit the overshoot of full employment, this is likely to mean a downward price adjustment for a weighted average of government bonds, corporate credit, and equities. Effectively, the overall size of the pie is set to shrink, and in that environment it will get harder to generate good risk-adjusted returns for all but the savviest investors."
emphasis added