The effective tax cut for the first year 2018 (declining every year after) boosts real income by 2.2%. The tax cut effect pushes up inflation and real income for 6 months then falls off. So I expect 2.0 core inflation sooner by May.  The transition to ccpi 2.0 by May will make 2018 very different from 2017 (when ccpi fell below 2.0 in May).

Below you can see transitions to ccpi 2.0 (2011-2012, 2015-2016):

1. 2011-2012 bad SPY performance until QE in Sep 2012
2. 2016 bad SPY performance until after election Nov 2016

Note also weak economic growth and lower ccpi from 2008-onwards (mostly below 2.0) compared to 2004-2007 (above 2.0).

The last equivalent tax cut was 2011-2012 when payroll taxes were cut 2%. CCPI rose during this 6 month period. See below:

SPY will rise 2-4% by Feb and then go sideways with rebounds after pullbacks (SPY +10.5% for the year).  SPY will have pullbacks starting in June when ccpi 2.0 has been reached.

TLT will do ok for first 6 mo and badly after 2.0 ccpi. (TLT +5% for the year)

Oil MACD will also go negative by Feb-Mar.