For the past decade, central bankers have been pursuing a fatuous and dangerous inflation target of about 2%. Well, now that it has been pretty much achieved on a global basis, the cacophony of their remorse is going to be deafening.

Beginning this fall, and continuing throughout 2019, the stock market’s performance should be vastly different from what has occurred during the prior few years. Indeed, the huge reconciliation of stock prices is arriving now.

The primary reason behind this is the watershed change in global central banks’ monetary policies. For years central banks had been keeping rates near 0%, or below, and at the same time printing over a hundred billion dollars’ worth of fiat currencies each and every month to purchase bonds and stocks. That is all changing now. According to Capital Economics, fourteen major global central banks are either in the process right now, or have indicated that they be will next year, in the process of raising interest rates. At the same time, QE on a global net basis will plunge from $180 billion per month at its peak during 2017, to $0 by December…and will then go negative in 2019.

The amount of corporate stock buybacks will plunge next year as well. Estimates of between $500 billion to $1 trillion of stock buybacks have occurred so far due to the one-time mandatory repatriation of foreign earnings found in Trump’s tax cut package passed in December of 2017. However, that one-time boost from repatriation is waning quickly. In addition, there are now much higher borrowing costs for corporations that have relied on the process of issuing debt to buy back shares. This will only get more expensive next year and will also attenuate the number of corporate buybacks.

The benefits corporations enjoyed from lower taxes this year are being gradually offset by rising debt service payments and tariffs. This pressure on these fronts will also increase greatly next year.

There will most assuredly be a plunge in earnings growth rates from the current 25% pace, to the low single digits at best when Q1 ’19 gets compared to Q1 of this year. When you combine that surge in borrowing costs with; the stronger dollar, tariffs from the trade war, oil price spike, rising wages, the slowdown in China, the chaos in EM currencies–along with the significant bond market and equity market volatility around the world–you can clearly understand why S&P 500 companies will endure much greater pressure on earnings next year. And, given the fact that these corporations generate nearly half of their revenues in from foreign markets, don’t expect their share prices to be immune.