The U.S. economy is performing extremely well and remains one of the stronger pillars in the global economy. The unemployment rate is near record lows, wage inflation is taking root, and consumer confidence is high.

The domestic economy is functioning as well as any period since 2007, however we expect economic growth to slow next year. Measured by GDP, we expect the economy grew by a solid 4.0% in the second quarter and is growing at a rate of 2.7% with most sectors performing well.

We are at an interesting point in this economic and capital market adventure we have been through for almost ten years. We hesitate to use the word “cycle” because that implies that economic activity, measured by the output of our country, and in turn the capital markets, would actually turn down.

We live in a democracy that provides freedoms and liberties to its citizens. Linked closely with our democracy is capitalism, the exchange of goods and services for a profit. Since the 1930’s, a consistent hallmark of our form or capitalism has been free markets which have reasonable government regulation to protect market participants.

The early optimism that President Trump would be able to reinvigorate domestic economic growth has faded as Congress struggled to pass health care legislation and confusion exists around Trump’s political agenda.

Capitalism and democracy work together to power economic growth and sustain our standard of living; capitalism, with all of its faults, is still the best generator of investment and human capital in the world.

In order to make sense of what is taking place in our economy, capital markets and even our society, we are working within a paradigm in which we assume that our form of democracy and capitalism is changing at a more rapid pace than before.