How will central banks deal with 'violent market movements' if Goldilocks environment is disturbed?

Data 'undershoots expectations'

This year has been dominated by a "tug of war" between two different constituencies of investors: those with a positive view on the potential for a sustainable economic recovery, and those who see little fundamental change from the low-growth, low-inflation environment that has characterised much of the post-crisis period.

For the former, the sharp reflationary moment from 2016 is very evident in the real economy, with improving economic growth supported by easier financial conditions and a weaker bias to the US dollar.  However, there is little evidence of any real inflationary impulse and US inflation data continues to undershoot consensus expectations. ETF Snapshot: Government bonds see outflows amid rising rate environment The Federal Reserve's preferred measure, core PCE inflation, has been below its target for five years and has fallen to 1.3% in 2017. The tug of war has created sharp revers...