THE ECONOMY WON'T BE AN ISSUE:

I've never been shy about forecasting recession when the conditions are ripe, as I did emphatically during the dot-com bubble of the late 1990s and in 2007 as the collapse in subprime mortgages began to unfold. But this year, I simply didn't see a trigger for a business downturn (although I did allow that if crude oil prices dropped to my target of $10 to $20 per barrel, the resulting financial fallout would probably precipitate a global economic downturn). Instead, I noted that recessions have typically resulted from substantial Fed interest rate hikes or major shocks.

Sure, the Fed raised interest rates in December and planned four more hikes in 2016, but it had cried wolf so many times about accelerating growth and a resurgent labor market that if it did nothing last year, its credibility would have been further eroded.

Then a funny thing happened on the way to that widely forecast recession. China didn't massively devalue the yuan and turned, as it has in the past, to infrastructure spending to stave off a collapse in economic growth, despite the predictable result of more debt and more excess capacity.

And with inflation running well below the Fed's 2 percent target and deflation still a danger, the U.S. central bank scaled back its rate-raising plans. At the March 16 meeting, it halved the number of expected quarter-point rate hikes this year to two, and reduced its 2016 year-end inflation forecast to 1.2 percent from 1.6 percent. The Standard & Poor's 500 Index, which dropped 5 percent in January, has been rising since the second week of February and is now about 1 percent higher for the year.

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