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FED SURVEY
They responded to CNBCs invitation to participate in our online survey. Their responses were
collected on January 26-28, 2017. Participants were not required to answer every question.
April 30,
0%
10%
20%
50%
60%
70%
80%
90%
0%
98%
0%
40%
2%
Don't know/unsure
30%
100%
FED SURVEY
January 31, 2017
2. After its upcoming meeting, the Federal Reserve's next
directional move will most likely be:
FED SURVEY
April 30,
100%
100%
94%
90%
88%
95%
98%
92%
90%
100% 100%
95%
80%
70%
60%
50%
40%
30%
20%
10%
10%
10%
4%
5%
3%
2%
5%
0%
0%
0%
Jan 27 Mar 15 Apr 26 Jun 14
Nov 1
Dec 13 Jan 31
FED SURVEY
January 31, 2017
(For the 100% answering the next move will be to raise rates)
90%
Average:
May 2017
80%
70%
60%
50%
43%
40%
35%
30%
20%
8%
10%
0%
10%
3%
0%
Feb
Mar
Apr
May
Jun
Jul
0% 0% 0% 0% 0%
Aug
Sep
Oct
Nov
3%
Dec After
Dec
'17
FED SURVEY
January 31, 2017
How many times will the Federal Reserve hike rates in
2017?
FED SURVEY
April 30,
0.00
0.50
1.00
1.50
Survey Dates
Nov 1
Dec 13
Jan 31
2.00
Average
2.50
3.00
1.97
2.50
2.78
3.50
4.00
4.50
5.00
FED SURVEY
January 31, 2017
3. How will President Trump's economic policies affect:?
Decrease a lot
Decrease somewhat
FED
SURVEY
0%
April
10% 30,20%
0%
Overall
growth
5%
30%
Have no effect
40%
50%
Increase somewhat
60%
13%
Employment
67%
23%
63%
3%
Deficits
0%
3%
0%
43%
Inflation
0%
0%
55%
8%
80%
13%
0%
Stocks
8%
13%
64%
15%
Bond
yields
0%
0%
0%
25%
80%
13%
15%
0%
70%
Increase a lot
75%
90%
100%
FED SURVEY
January 31, 2017
4. Please rate President-elect Donald Trump's economic
policies in the following areas:
FED SURVEY
April 30,
Very negative
Somewhat negative
0%
10%
20%
Neutral
30%
40%
Somewhat positive
50%
60%
70%
0%
8%
18%
54%
21%
0%
0%
8%
45%
48%
55%
28%
Trade
5%
10%
3%
3%
3%
0%
36%
59%
Very positive
80%
90%
100%
FED SURVEY
January 31, 2017
5. President Trumps relations with China will most likely
lead to?
FED SURVEY
April 30,
0%
20%
3%
8%
53%
Don't know/unsure
60%
15%
40%
15%
8%
80%
100%
FED SURVEY
January 31, 2017
6. President Trumps relations with Mexico will most likely
lead to?
FED SURVEY
April 30,
0%
20%
0%
3%
58%
5%
Don't know/unsure
5%
Page 8 of 36
60%
30%
40%
80%
100%
FED SURVEY
January 31, 2017
7. President Trump has threatened to place a 35 percent
tariff on imports of companies that have moved jobs and
FEDfrom
SURVEY
production
the U.S. to other countries. What effect
April
30, have on overall growth and jobs?
would this
tariff
Dec 13
Jan 31
100%
90%
80%
70%
64%
60%
50%
43%
40%
28%
30%
28%
21%
20%
9%
7%
10%
0%
0%
Decrease a
lot
Decrease
somewhat
Have no
effect
0%
Increase
somewhat
Note: The Dec 13 survey asked only about the effect on overall growth.
3%
Increase a
lot
FED SURVEY
January 31, 2017
8. If the US imposes tariffs on imports from other countries,
including imports on US companies that move jobs
FED
overseas,
do SURVEY
you expect these other countries to adopt
April
30,
retaliatory
tariffs?
Yes
China
No
Mexico
Don't know/unsure
Canada
Japan
0%
10%
20%
30%
65%
73%
70%
40%
93%
50%
60%
70%
25%
80%
18%
20%
90%
100%
3%
5%
10%
10%
10%
FED SURVEY
January 31, 2017
9. What is FED
your SURVEY
general view of the border adjustment tax
currently
being
April
30,proposed by House Republicans?
100%
90%
80%
70%
60%
50%
45%
40%
30%
30%
18%
20%
8%
10%
0%
Positive
Neutral
Negative
Don't know
enough to have
an opinion
FED SURVEY
January 31, 2017
10.
What is your opinion of fiscal stimulus, including tax
cuts and infrastructure spending?
FED SURVEY
100%
April 30,
90%
80%
70%
70%
60%
50%
40%
30%
18%
20%
10%
10%
3%
0%
More effective
than Fed
stimulus
Virtually the
same as Fed
stimulus
Less effective
than Fed
stimulus
Don't
know/unsure
FED SURVEY
January 31, 2017
11.
Which of the following statements is closest to your
view of fiscal stimulus?
FED SURVEY
100%
April 30,
90%
80%
70%
60%
48%
50%
40%
40%
30%
20%
13%
10%
0%
Don't know/unsure
FED SURVEY
January 31, 2017
12.
President Trump has publicly singled out companies
for their plans to move jobs or factories overseas and he
FED involved
SURVEYin decisions made by individual
has become
April
companies
to30,
help keep jobs in the US. What effects will
these presidential actions have on overall US job growth?
100%
90%
80%
70%
60%
50%
50%
40%
28%
30%
18%
20%
10%
5%
0%
0%
0%
FED SURVEY
January 31, 2017
13.
Mr. Trump will likely make several appointments to
the Federal Reserve Board of Governors. The people he
FEDare
SURVEY
will appoint
likely to support:
April 30,
Dec 13
Jan 31
100%
90%
80%
70%
60%
50%
50%
46%
43%
38%
40%
30%
20%
20%
10%
5%
0%
FED SURVEY
January 31, 2017
14.
FED SURVEY
100%
Dec 13
Jan 31
April 30,
90%
82%
80%
74%
70%
60%
50%
40%
30%
21%
20%
11%
10%
7%
5%
0%
Yes
No
Don't know
FED SURVEY
January 31, 2017
15.
If Ms. Yellen is not reappointed, who will Mr. Trump
nominate to replace her:
Jan 31
April 30,
0%
10%
20%
30%
22%
19%
Don't know
14%
17%
Kevin Warsh
3%
8%
Jerome Powell
3%
4%
Larry Lindsey
3%
4%
Non-academic
3%
4%
William Dudley
Friedrich Hayek (1899-1992)
Larry Kudlow
4%
4%
4%
3%
Jared Kushner
3%
John Allison
3%
3%
Richard Fischer
3%
Someone unqualified
3%
50%
38%
33%
John Taylor
Glen Hubbard
40%
60%
70%
80%
90%
100%
FED SURVEY
January 31, 2017
16.
Recent stock market gains appears to be mostly
driven by:
100%
Jan 31
90%
82%
80%
72%
70%
60%
50%
40%
30%
20%
26%
18%
10%
0%
0%
Solid economic
fundamentals,
including a better
corporate profit
outlook
Expectations for
policy changes from
the new
administration
3%
Don't know/unsure
FED SURVEY
January 31, 2017
17.
The stock market's expectations for Trump
administration policy changes are:
100%
Jan 31
90%
80%
70%
60%
56% 56%
50%
42%
39%
40%
30%
20%
10%
2%
3%
0%
Too optimistic
Realistic
Too pessimistic
0%
3%
Don't
know/unsure
FED SURVEY
January 31, 2017
18.
Where do you expect the S&P 500 stock index will
be on ?
FED SURVEY
April 30,
December 31, 2017
2,600
2,500
2480
2453
2,400
2357
2354
2,300
2223
2249
2234 2244
2,200
2275
2255
2242
2200
2158
2,100
2107
2,000
1,900
1,800
Dec Jan 15 Jan 26 Mar Apr 26Jun 14 Jul 26 Aug
15
'16
15
24
Survey Dates
Sep
20
Nov 1
Dec Jan 31
13
'17
FED SURVEY
January 31, 2017
19.
What do you expect the yield on the 10-year
Treasury note will be on ?
FED SURVEY
April 30,
4.0%
3.44% 3.43%
3.5%
3.09%
2.96%
3.0%
2.90%
2.88%
2.5%
2.83%
2.58%
2.54%
2.24% 2.26%
2.28% 2.25%
2.0%
1.5%
1.0%
Dec 15 Jan 26 Mar 15 Apr 26 Jun 14 Jul 26 Aug 24 Sep 20 Nov 1 Dec 13 Jan 31
'16
'17
Survey Dates
FED SURVEY
January 31, 2017
20.
Where do you expect the fed funds target rate will
be on ?
April 30,
3.0%
2.67% 2.70%
2.5%
2.17%
2.22%
2.07%
2.0%
1.87%
2.10%
2.15%
1.81%
1.78%
1.69%
1.49%
1.5%
1.43%
1.26%
1.22%
1.18%
1.0%
1.16%
1.32%
1.09%
0.5%
0.0%
Dec Jan 15 Jan 26 Mar Apr 26Jun 14 Jul 26 Aug
15
'16
15
24
Sep
20
Nov 1
Dec Jan 31
13
'17
FED SURVEY
January 31, 2017
21.
At what fed funds level will the Federal Reserve stop
hiking rates in the current cycle? That is, what will be the
SURVEY
terminalFED
rate?
April 30,
4.0%
3.5%
3.30%
3.20%
3.16%
3.0%
3.17%
3.11%
3.06%
3.04%
2.98%
2.92%
2.5%
2.91%
2.73%
2.85% 2.79%
2.69%
2.65%
2.58%
2.65%
2.64%
2.48%
2.56%
2.42%
2.44%
2.29%
2.0%
Survey Dates
FED SURVEY
January 31, 2017
22.
When do you believe fed funds will reach its
terminal rate?
FED SURVEY
Survey
Date30,
April
Forecast
August 20 survey
Q4 2017
September 16 survey
Q3 2017
October 28 survey
Q4 2017
December 16 survey
Q1 2018
Q1 2018
March 17 survey
Q4 2017
April 28 survey
Q1 2018
June 16 survey
Q1 2018
July 28 survey
Q2 2018
August 25 survey
Q3 2018
September 16 survey
Q1 2018
October 27 survey
Q3 2018
December 15 survey
Q1 2018
Q2 2018
Mar 15 survey
Q3 2018
Apr 26 survey
Q4 2018
Jun 14 survey
Q4 2018
Jul 26 survey
Q4 2018
Aug 24 survey
Q4 2018
Sep 20 survey
Q4 2018
Nov 1 survey
Q1 2019
Dec 13 survey
Q2 2019
Q2 2019
FED SURVEY
January 31, 2017
23. What is your forecast for the year-over-year percentage
change in real U.S. GDP for ?
2018
3.0%
2.8%
+2.76% +2.75%
2.6%
+2.57%
+2.51%
+2.43%
+2.41%
2.4%
+2.28%
+2.31%
+2.25% +2.26%
2.2%
+2.21%
+2.24%
+2.16%
2.0%
1.8%
2017
Dec 15
Jan 26
'16
Mar 15
Apr 26
Jun 14
Jul 26
Aug 24
Sep 20
Nov 1
Dec 13
Jan 31
+2.43%
+2.31%
+2.41%
+2.21%
+2.25%
+2.26%
+2.24%
+2.28%
+2.16%
+2.57%
+2.51%
+2.76%
+2.75%
2018
FED SURVEY
January 31, 2017
25.
What is your forecast for the year-over-year
percentage
in the headline U.S. CPI for ?
FEDchange
SURVEY
April 30,
2017
2018
2.8%
2.64%
2.6%
2.57%
2.36%
2.4%
2.38%
2.24%
2.20%
2.2%
2.12%
2.13%
2.12%
2.09%
2.07%
2.0%
2.16%
2.02%
1.8%
1.6%
Dec 15 Jan 26 Mar 15 Apr 26 Jun 14 Jul 26 Aug 24 Sep 20 Nov 1 Dec 13 Jan 31
'16
'17
Survey Dates
FED SURVEY
January 31, 2017
26.
When do you expect the Fed to allow its balance
sheet to decline?
FED
0% SURVEY5%
April 30,
Feb
Mar
0%
Apr
0%
May
0%
10%
10%
Jul
3%
Aug
3%
Sep
5%
0%
Nov
5%
Dec
10%
Jan '18
Feb
15%
0%
Mar
8%
Apr
0%
May
0%
Jun
5%
Jul
0%
Aug
0%
Sep
5%
Oct
0%
Nov
0%
Dec
3%
Jan '19
Feb '19 or
8%
5%
Never
20%
3%
Jun
Oct
15%
13%
FED SURVEY
January 31, 2017
27. What is the single biggest threat facing the U.S.
economic recovery?
20%
15%
8%
4%
8%
5%
7%
10%
3%
12%
6%
31%
40%
0%
6%
3%
3%
6%
0%
0%
0%
0%
5%
0%
0%
2%
3%
0%
3%
5%
0%
31%
28%
30%
27%
29%
32%
21%
23%
26%
29%
26%
18%
14%
13%
14%
11%
17%
21%
16%
8%
10%
10%
21%
22%
28%
20%
19%
16%
27%
9%
5%
20%
20%
22%
22%
24%
29%
30%
26%
21%
12%
29%
15%
14%
9%
0%
8%
3%
9%
2%
5%
5%
5%
3%
2%
5%
7%
3%
11%
8%
2%
3%
0%
3%
0%
2%
3%
2%
2%
3%
3%
6%
6%
3%
3%
0%
3%
3%
0%
0%
0%
3%
0%
0%
0%
2%
3%
2%
3%
3%
0%
7%
3%
2%
3%
2%
0%
3%
0%
0%
5%
5%
3%
3%
3%
6%
0%
6%
0%
0%
0%
4%
8%
0%
3%
0%
2%
0%
2%
0%
0%
3%
0%
0%
2%
0%
2%
4%
3%
2%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
10%
18%
8%
15%
12%
5%
8%
12%
6%
10%
3%
6%
6%
6%
14%
12%
0%
8%
8%
0%
5%
0%
3%
2%
3%
0%
8%
7%
3%
18%
12%
11%
8%
14%
16%
8%
11%
25%
6%
8%
13%
10%
5%
5%
7%
0%
10%
3%
3%
3%
7%
10%
41%
28%
28%
22%
29%
45%
41%
44%
44%
33%
36%
28%
22%
31%
30%
32%
19%
15%
6%
17%
8%
6%
9%
8%
10%
5%
8%
5%
9%
8%
7%
3%
8%
3%
0%
0%
3%
0%
0%
0%
0%
0%
3%
5%
0%
2%
0%
3%
7%
5%
7%
6%
5%
0%
7%
0%
13%
7%
14%
8%
5%
28%
51%
10%
11%
13%
14%
7%
13%
2%
21%
18%
13%
12%
11%
8%
3%
16%
14%
19%
11%
9%
14%
5%
15%
23%
21%
11%
10%
7%
11%
11%
8%
5%
0%
Don't know/
unsure
Other
Trump's temperament
Protectionist trade
policies
Outcome of US
presidential election
Immigration policy
Geopolitical risks
Deficits
Debt ceiling
Deflation
Inflation
April 30,
Tax/
regulatory policies
Survey
Date
Apr 30
Jun 18
Jul 30
Sep 17
Oct 29
Dec 17
Jan 28 '14
Mar 18
Apr 28
Jul 29
Sep 16
Oct 28
Dec 16
Jan 27 '15
Mar 17
April 28
Jun 16
Jul 28
Sept 16
Oct 27
Dec 15
Jan 26 '16
Mar 15
Apr 26
Jun 14
Jul 26
Aug 24
Sep 20
Nov 1
Dec 13
Jan 31 '17
European recession/
financial crisis
FED SURVEY
0%
0%
4%
2%
0%
2%
0%
0%
0%
3%
3%
3%
0%
0%
0%
3%
0%
0%
2%
0%
0%
3%
0%
2%
0%
2%
0%
0%
0%
2%
0%
FED SURVEY
January 31, 2017
28.
In the next 12 months, what percent probability do
you place on the U.S. entering recession? (0%=No
FED
SURVEY
chance of
recession,
100%=Certainty of recession)
April 30,
40%
36.1%
35%
34.0%
30%
28.8%
28.5%
26.0%
25.9%
25.3%
25.5%
25%
24.4%
23.5%
22.9%
24.1%
22.1%
20%
20.6%
20.3%
20.4%
18.2%
17.6%
15%
16.9%
17.3%
16.9%
16.2%
18.6%
16.4%
17.4%
18.1%
15.1%
16.2%
15.2%
22.2%
21.6%
21.1%
18.5%
18.4%
19.1%
23.2%
15.1%
15.3%
15.0%
14.6%
13.6%
14.7%
10%
Aug 11,
Sep 19
Oct 31
Jan 23,
Mar 16
Apr 24
Jul 31
Sep 12
Dec 11
Jan 29,
Mar 19
Apr 30
Jun 18
Jul 30
Sep 6
Oct 29
Dec 17
Jan 28 '14
Mar 18
Apr 28
Jul 29
Sep 16
Oct 28
Dec 16
Jan 27 '15
Mar 17
April 28
Jun 16
Jul 28
Sept 16
Oct 27
Dec 15
Jan 15 '16
Jan 26
Mar 15
Apr 26
Jun 14
Jul 26
Aug 24
Sep 20
Nov 1
Dec 13
Jan 31 '17
13.0%
FED SURVEY
January 31, 2017
29.
FED SURVEY
April 30,
Other
21%
Currencies
0%
Fixed Income
15%
Economics
49%
Equities
15%
Comments:
Jim Bianco, Bianco Research, President: The expectations are
for a Trump inspired reflation of the economy. That can come in one
of two forms, real growth or inflation. Currently it looks like it will be
more parts inflation than real growth.
Peter Boockvar, The Lindsey Group, Chief Market Analyst: The
Fed better start focusing more on the signals the markets are
sending as they are woefully behind the 8 ball.
FED SURVEY
January 31, 2017
Lou Brien, DRW Trading Group, Analyst: I think trading relations
is going to be the key dynamic for the economy this year. If there is
FED
SURVEY
a trade kerfuffle
during
the next year it will hit GDP. This is mainly
30,
because thereApril
is a distance
to travel between point A, the current
trading relationships, and point B, revitalizing domestic production
facilities in the US as a means to reduce the trade gap. A disruption
in trade while the economy moves between A and B will be
problematic. This will be the tricky bit for the economy in 2017, as I
see it.
Robert Brusca, Fact and Opinion Economics, Chief Economist:
Trump protectionism is a danger but it also an investment in the
future that no other administration has been willing to make. The
currency system is completely broken down. We have a managed FX
'system' - not true floating rates. The US has not run a current
account surplus since 1991. All the 'beauty' of a flexible rate system
has been coopted, made ugly and turned against the US. Since
'international financial reform' is an odd rallying cry and since no one
lines up behind it, using trade and commercial policy as a 2x4 to
whack the competition over the head for this continued manipulation
and abuse of the current system MAKES SENSE. We do not have free
trade. We have not had the benefits of free trade and we have less
to lose from this Trump gambit than most people think. I suspect
Trump wants leverage more than tariffs.
John Canally, LPL Financial, Chief Economic Strategist: Watch
the deficit.
John Donaldson, Haverford Trust Co.: It will be very difficult for
the FOMC to gauge the impact of any rate increases with the
possibility of simultaneous protectionist trade policies and large
deficit spending. Cannot see them moving before mid-year.
FED SURVEY
January 31, 2017
Neil Dutta, Renaissance Macro Research, Head of Economic
Research: While many forecasters are boosting expectations based
FED SURVEY
on a Trump tailwind,
the nasty secret, in our view, is that the
30,
momentum inApril
the economy
was strong to begin with. Inventories
have room to build and looser financial conditions over the last year
should lift business investment in coming quarters.
Robert Fry, Robert Fry Economics, Chief Economist: President
Trump is too focused on Mexico relative to China (biggest abuser of
global trade system) and Germany (biggest currency manipulator).
Trashing the Mexican economy with tariffs and other bad policies is
like throwing rocks through your neighbors' windows, thereby
reducing the value of YOUR home.
Kevin Giddis, Raymond James Financial, Head of Fixed
Income Capital Markets: We have entered a phase that I call
"Reactive Opportunity." The President is very hard to handicap and I
don't really know how much he can get done when Congress must be
dealt with to make the kind of sweeping changes he proposes. While
the trend for interest rates is up, I wouldn't be surprised if
something happens or doesn't happen that could "turn the cart" on
its head. Fun times!
Stuart Hoffman, PNC Financial, Chief Economist: Fiscal stimulus
and only gradual FOMC rate hikes (from a low level) in 2017-2018 is
a classic recipe for faster inflation and higher interest rates and
federal deficits.
Art Hogan, Wunderlich Securities, Chief Market Strategist:
Investors can get behind pro-growth policies and can't and won't
support protectionist policies. Trade wars, like all wars, end
negatively for all.
FED SURVEY
January 31, 2017
John Kattar, Al Maamur Capital, Chief Investment Officer: Two
separate, non-consensus thoughts: (1) The Border Adjustment Tax
is an excellentFED
idea SURVEY
that will result in more growth and jobs saved
April 30,
than even lowering
corporate tax rates. (2) Yellen is doing a better
job than her much heralded predecessors. I hope she is
reappointed.
Jack Kleinhenz, National Retail Federation, Chief Economist:
While the outlook for 2017 is most promising and the consumer, as
the key driver, will be supported by wage gains and continued job
growth, uncertainty about the scale and scope of fiscal policy
changes remain the critical risk to the U.S. outlook.
David Kotok, Cumberland Advisors, Chairman and Chief
Investment Officer: Trump policy outcomes are still lacking in
clarity. He is inconsistent. And he is eroding his support with
nonsense. Forecasting Trump policy is like sculpting fog.
Subodh Kumar, Subodh Kumar & Associates, President: We
see currencies and precious metals as reverting to being harbingers
of stress. Political caveat emptor is required as rhetoric appears on
abrogating agreements and even treaties. Yet the era ended over a
half century ago of banana republics, of foreign gunboats and
arbitrary colonial administrators. We see fixed income as having the
greater risks but favor short to medium term securities, especially in
U.S. dollars. In equities, we see Financials as crucial. In growth, we
favor Info Tech over Healthcare. In cyclicals, we favor Industrials
over Consumer segments. On restructuring, we favor Materials and
Energy. We overweight the U.S. for diversified delivery and Asia for
growth .
Guy LeBas, Janney Montgomery Scott, Chief Fixed Income
Strategist: Policy may be in a chaotic state, but the long term
fundamentals of slow population growth and questionable
productivity growth will carry the day and drive interest rates.
CNBC Fed Survey January 31, 2017
Page 33 of 36
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January 31, 2017
Donald Luskin, Trend Macrolytics, Chief Investment Officer: In
your questions about fiscal policy, the only reason I said I thought
FEDidea
SURVEY
they were a good
is that I think we need tax cuts. Government
April 30,
spending is useless
or worse.
Larry McMillan, McMillan Analysis, Founder: Just remember to
take what Trump says seriously, but not literally.
Rob Morgan, Sethi Financial Group, Chief Investment Officer:
In December, Fed Governor Lacker said we may need more than 3
hikes in 2017. I agree with him and think we'll see a hike every
quarter.
Joel Naroff, Naroff Economic Advisors, President: The markets
are way too optimistic about the Trump policies and in order not to
disappoint, Congress would have to pass policies that would cause
inflation and interest rates to balloon, risking a recession. If they
disappoint, the markets would correct. Either way, there could be
real problems ahead.
James Paulsen, Wells Capital Management, Chief Investment
Strategist: With the 10-year embedded CPI inflation expectation in
10-year TIP bonds rising today to 2.08% and with wage inflation
threatening to soon breach 3 percent, investors and the Fed may be
forced to focus more on inflation. Indeed, I believe a potential wild
card for 2017 is not only how many times will the Fed raise the
target funds rate but the possibility that they may opt for a 50 basis
point single move. The financial markets could be surprised this
year not only by the number of Fed hikes rates but also by the size
of at least one hike.
FED SURVEY
January 31, 2017
Lynn Reaser, Point Loma Nazarene University, Chief
Economist: The pursuit of a protectionist trade route could open a
FED SURVEY
whole new Pandora's
Box of economic and market risk. Depending
April
30, jeopardize other positive and pro-growth
on its intensity,
it could
policies.
John Roberts, Hilliard Lyons, Director of Research: I wanted to
put two risks on the list of risks for the economy: protectionist trade
policies and Trump's temperament, as they are linked as shown with
today's Mexican situation. President Trump's actions on the
trade/international front certainly open the window to a sharp
potential deterioration of relations between the US and its trading
partners. I hope that some of his advisors limit his blunt talk so as
to not hurt our relations in this regard. Our belief for a first half gain
in the equity markets followed by a second half correction is
predicated on investors being disappointed by the pace of the
introduction of the new administrations' policies, which we expect to
be much slower than anticipated combined with deteriorating
international relations.
John Ryding, RDQ Economics: On the second day of the March
FOMC meeting, the BLS will likely publish a 2.5% CPI inflation rate.
If the Fed does not hike rates that day, the market will not buy into
the SEP path of 3 hikes per year for 17 and 18.
Allen Sinai, Decision Economics, Chief Global Economist and
Strategist: The Trumpian world is hugely different than the preTrump world.
Diane Swonk, DS Economics, CEO and Founder: We could be
entering into the most fundamental shift in inflation and interest
rates in nearly forty years, with little knowledge about how markets
will react to cumulative changes.
FED SURVEY
January 31, 2017
Scott Wren, Wells Fargo Investment Institute, Senior Global
Equity Strategist: The stock market has done an admirable job of
SURVEY
not pricing in FED
too much
from a Trump administration in the near
30,
term. The S&PApril
500 is
trading at what we consider "fair value" based
on the trajectory of the economy and the fundamentals in place well
before the election. Stock valuations are not stretched. If and when
the new administration's pro-growth policies are implemented (and if
the magnitude is great enough) they will in all likelihood not show up
in the economic statistics until the 2018, 2019, 2020 time frame.
This is not a 2017 story.
Mark Zandi, Moody's Analytics, Chief Economist: The economic
outlook critically depends on what policies the Trump Administration
and Congress pursue. If they focus on corporate tax reform and
targeted regulatory relief the economy's prospects will brighten. But
if they instead focus on restricting trade and immigration the outlook
will quickly turn darker.