'Melt-up' was perhaps the most over-used phrase on Wall Street in January. It suggested that investors were enjoying the last euphoric rally in an asset class bull market, before the collapse.

Last week, many would say this came to be – and to a very minor extent it did.

Last October, the S&P 500 moved into an upswing trajectory phase, rising by 7.4 per cent to its peak at the end of January. It has since fallen by 10 per cent, and so now it’s in official correction territory. Despite this only wiping out a relatively low percentage of the bull market that started at the beginning of 2016, volatility has, it would appear, returned, with the VIX back at levels only experienced three times since 2010.

So what was the reason for the sell-off? Although it echoed around the world, it came from two events in U.S. equities. First, it was prompted by a fall in U.S. healthcare stocks after Amazon announced it was thinking of moving into the sector. The fear simply fed on itself. Investors sold because others were selling. After months of strong gains, against a low volatility environment, investors had become jumpy.

Second, and perhaps more significantly, it was the publication of the 2.9 per cent year-on-year wage rise, with stronger than expected new jobs growth. With the economy at full employment, this drove the markets to pay close attention to concerns over inflation pressures.

Many are fearing an overheating of the economy, in part, because of President Trump’s tax cuts and his promise to deregulate business. In economics speak, it’s a fiscal stimulus measure, with supply-side reforms.

Yet surely its better to risk an overheating economy, which, if it does overheat, will allow the Fed to raise rates and normalize monetary policy, than to have continued with lukewarm growth and the need for very low interest rates.

The funk of the last decade, in which the global economy has been kept alive through ultra-loose interest rates and massive money creation, can be put to an end.

In the near term, this will cause adjustment to bond and stock prices, which is what we’ve seen over the last fortnight. But the stronger economic growth being promised by the Trump policies will lead to stronger profits growth, so offering support to share prices, while the return of inflation will help erode the real cost of sovereign, corporate and consumer debt, so helping to deflate the amount of debt in the global financial system that contributes to its vulnerability.

I believe that a lot of heat will have been taken out of the market with the correction and I’m still hoping for modest year-on year gains for 2018 due to rising profits and still-low risk-free rates.

Nigel Green is founder and CEO of deVere Group. One of the world’s largest independent financial advisory organizations, de Vere does business in 100 countries and has more than $12 billion under advisement.