The global economy enters 2018 with good momentum. Expectations for growth this year are rising in many countries, equities are hitting new highs and business confidence is buoyant.

The worries around Brexit, the US elections, risks in the Chinese economy, and populism in Europe that loomed large 12-18 months ago have eased. Our “worry index,” which tracks references to terms such as risk, uncertainty, and instability in the major business papers has fallen by 30 percent from its 2016 peak. Financial measures of risk have declined, so much so that some see markets as overly complacent.

Commodity Prices are Recovering

Last week’s surge in the oil price, to a three-year high of $70, fits with the idea of gathering global demand. A pickup in global trade has pushed up the benchmark index of sea freight rates by 50 percent in the space of a year.

This looks like that rare thing: a synchronized global recovery, across developed and emerging countries, that is delivering lower unemployment. In much of the rich world, including the US, Germany, Japan, and the UK, jobless rates are close to, or lower than at any time in at least 25 years.

Tax cuts for consumers and businesses should bolster the growth.

The turnaround has been particularly pronounced in two regions which have suffered persistently weak growth in recent years. Japan and the euro area saw unexpectedly strong recoveries in 2017. Both economies should post rates of growth this year at or around the levels seen last year. For the euro area, 2017 and 2018 seem likely to be the best two-year period for growth in 11 years.

America’s recovery has unfolded in line with earlier expectations, confounding the fears of Trump skeptics and dashing hopes of an immediate “Trump boost.” The upswing was already underway at the time of the presidential election in late 2016 and has sped up since last spring.

Buoyant business and consumer confidence and still-easy credit conditions point to a further acceleration in US growth this year. Tax cuts for consumers and businesses should bolster the growth. The Federal Reserve will continue to lead the world in tightening monetary policy. Markets are assuming that US interest rates will rise at least a further 75bp this year, taking them to 2.25 percent.