Two of the biggest hitters in financial markets are sounding warnings against complacency in the global economic outlook.

After the first week of 2018 saw strong data and multiple stock-market records, Citigroup Inc. and Pacific Investment Management Co. told clients in the last few days that there are still reasons to be worried.

While both agree there are some causes for optimism, they cite geopolitical factors, a removal of central bank stimulus and the risk of an inflation overshoot as possible catalysts for an end to the current economic expansion and market exuberance.

Investors are showing few signs of unease with global stocks at record highs and volatility measures still subdued. While riskier assets have recorded further gains in the first trading week of the year, Mark Schofield at Citi warned the potential payoff from such trades is diminishing.

“It is too early to call an end to the bull-market in risk assets but the risk/reward profile is deteriorating as expected returns peak and volatility begins to rise. Asset allocators must weigh up where we are in the business cycle, and what comes next. The ‘Goldilocks’ environment cannot last forever; a plateau in growth would be more bearish than a pick-up in inflation.”

Meanwhile, Joachim Fels at Pimco points to signs that U.S. jobs growth may be peaking as a “a clear sign that we are reaching the later stages of the business cycle” -- a fact that also increases the chance of an inflation overshoot.

Still, the biggest risk is:

“Monetary overkill by central banks that seem more eager than ever to escape from bloated balance sheets and the dreaded lower bound of interest rates. Led by the Fed, the tide of global monetary policy is turning, and when the tide goes out, we will find out who is swimming naked.”