CNBC Fed Survey – January 26, 2016 Page 1 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
These survey results represent the opinions of 40 of the nation’s top money managers, investment strategists, and professional economists. They responded to CNBC’s invitation to participate in our online survey. Their responses were collected on January 21-22, 2016. Participants were not required to answer every question. Results are also shown for identical questions in earlier surveys. This is not intended to be a scientific poll and its results should not be extrapolated beyond those who did accept our invitation.
1. At its January meeting, the Federal Reserve will:
0%
0%
100%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Raise interest rates
Lower interest rates
Keep rates unchanged
Don't know/unsure
CNBC Fed Survey – January 26, 2016 Page 2 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
2. After January's meeting, the Federal Reserve's next move will most likely be:
When will the Federal Reserve make its next move?How many
times will the Federal Reserve hike rates this year (2016)?
74%
18%
0%
8%
88%
10%
0%
3%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Raise interest rates
Lower interest rates
Move to negative interest rates
Launch new quantitative easing
Jan 15 Jan 27
For respondents who said: Average month:
Raise interest rates
(88%) May 2016
Lower interest rates
(10%) August 2016
Move to negative
interest rates (0%) --
Launch new quantitative
easing (3%) April 2016
CNBC Fed Survey – January 26, 2016 Page 3 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
2%
12%
29%
21%
29%
7%
14%
14%
40%
10%
16%
4%
2%
13%
13%
40%
15%
15%
3%
0%
0%
0%
0%
0%
0%
3%
0%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
0
1
2
3
4
5
6
7
8
9
10
More than 10
Fed will cut rates
Don't know/unsure
Dec 15 Jan 15 Jan 26
Averages:
Dec 15 survey: 2.8
Jan 15 survey: 2.1
Jan 26 survey: 2.1
CNBC Fed Survey – January 26, 2016 Page 4 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
4. Please rate the following factors on how much influence they had on the recent stock sell-off. (5=Maximum
influence, 0=Minimum influence)
Other:
Bull markets eventually end
and this one has been the third
longest in history.
Global (including US) economy
is still so weak, that the
market needs Fed to help it
out.
Irrationality
Markets implicitly became too
far ahead of deliverable growth
whether economic or company.
Profits recession not expected
to end until Q4.
The observable fundamentals
look decent. What troubles the
market are the unobservable
risks.
4.33
4.10
3.77
3.58
2.89
2.63
2.44
2.42
0 1 2 3 4 5
Other
Oil price decline
Slowdown in China
growth
Slowdown in globalgrowth
Fed forecast for anaverage of four rate
hikes this year
Normal market volatilityafter recent strong gains
Slowdown in USeconomic growth
Recent Fed rate hike
Average response
CNBC Fed Survey – January 26, 2016 Page 5 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
Italian banking crisis is missed
by markets. High yield
meltdown is missed by
markets.
The Fed Dec. rate hike and 4-
hike forecast is only one of
many factors that combined
have led to the selloff and
increased volatility.
The severity of both the oil
price drop and the slowdown in
China were consensus-
destroying moves.
Stupid pet tricks on the part of
the Fed. Its dogmatic approach
to policy is not appreciated in
this era where new thinking (or
at least SOME thinking) is
required. The Fed is so knee
jerk.
Oil price decline viewed as a
negative sign for US and global
economy but will come to be
seen as positive once oil price
stops falling.
Winter consumer spending was
disappointing especially in light
of the theoretical boost from
low gas prices. Low oil prices
are now mostly seen as bad
news, a U turn from the
general view a few months
ago.
Effect of oil price decline on
high yield (HY) bond spreads of
energy and commodity related
issuers. Wider HY spreads for
issuers outside of energy and
commodities as well. The
tendency of widening HY
spreads to precede a
meaningful slowdown or a
recession in the U.S. has been
a big negative influence on the
stock market.
China is new at currency
devaluation and it makes us
nervous. They will get better
and we will calm down.
Fear mongering and risk
aversion. Political uncertainty
and lack of reasonable
candidates with
comprehensible platforms.
CNBC Fed Survey – January 26, 2016 Page 6 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
5. What impact will the recent stock market sell-off have on the Fed?
56%
36%
5%
3%
0%
10%
20%
30%
40%
50%
60%
Will delay futurehikes
Will have no effecton future hikes
Will prompt Fed tocut rates or ease
policy further
Don't know/unsure
CNBC Fed Survey – January 26, 2016 Page 7 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
6. How will the recent declines for stocks and Treasury yields affect the economy in the first quarter?
40%
0%
61%
0%
0% 10% 20% 30% 40% 50% 60% 70%
Reduce growth
Increase growth
Have no effect on growth
Don't know/unsure
Average reduction: 0.4 percentage points
CNBC Fed Survey – January 26, 2016 Page 8 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
7. How serious a concern is China for the US economy? (10=Highest level of seriousness, 1=Not serious at all)
5.1
4.6 4.7 4.7
1
2
3
4
5
6
7
8
9
10
Aug 25 Sep 16 Oct 27 Jan 26
Survey Dates
CNBC Fed Survey – January 26, 2016 Page 9 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
8. Where do you expect the S&P 500 stock index will be on … ?
2311 2296
2247
2259
2293
2254
2159
2166
2140
2000
2035
2223
2107
2158
1,800
1,850
1,900
1,950
2,000
2,050
2,100
2,150
2,200
2,250
2,300
2,350
Dec 16 Jan 27'15
Mar 17 April28
Jun 16 Jul 28 Sept16
Oct 27 Dec 15 Jan 15'16
Jan 26
Survey Dates
December 31, 2016 December 31, 2017
CNBC Fed Survey – January 26, 2016 Page 10 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
9. What do you expect the yield on the 10-year Treasury note will be on … ?
3.52%
3.04%
3.14%
2.89%
3.24%
3.17%
2.88%
2.67% 2.67%
2.51%
3.09%
2.88%
2.0%
2.5%
3.0%
3.5%
4.0%
Dec 16 Jan 27'15
Mar 17 April 28 Jul 16 Jul 28 Sept 16 Oct 27 Dec 15 Jan 26'16
Survey Dates
December 31, 2016 December 31, 2017
CNBC Fed Survey – January 26, 2016 Page 11 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
10. Where do you expect the fed funds target rate will be on … ?
1.99%
2.13%
2.04%
1.93%
1.75%
1.84%
1.46%
1.56%
1.41%
1.12%
1.17%
0.91% 0.90% 0.85%
0.88%
1.61% 1.61% 1.62%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Aug20
Sep16
Oct28
Dec16
Jan27,'15
Mar17
April28
Jun16
Jul28
Aug25
Sept16
Oct27
Dec15
Jan15'16
Jan26
Dec 31, 2016 Dec 31, 2017
CNBC Fed Survey – January 26, 2016 Page 12 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
11. At what fed funds level will the Federal Reserve stop hiking rates in the current cycle? That is, what will be the terminal rate?
3.16%
3.20%
3.30%
3.17% 3.11%
3.04%
2.85%
3.06%
2.98%
2.79%
2.69%
2.65% 2.58%
2.56%
2.0%
2.5%
3.0%
3.5%
4.0%
Aug20
Sep16
Oct28
Dec16
Jan27,
'15
Mar17
Apr28
Jun16
Jul28
Aug25
Sept16
Oct27
Dec15
Jan26
'16
Survey Dates
CNBC Fed Survey – January 26, 2016 Page 13 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
12. When do you believe fed funds will reach its terminal rate?
Survey Date Forecast
August 20 survey Q4 2017
September 16 survey Q3 2017
October 28 survey Q4 2017
December 16 survey Q1 2018
Jan. 27, 2015 survey 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
Jan. 26, 2016 survey Q2 2018
CNBC Fed Survey – January 26, 2016 Page 14 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
13. What is your forecast for the year-over-year percentage change in real U.S. GDP for …?
Dec 16Jan 27,
'15Mar 17 April 28 Jun 16 Jul 28 Sept 16 Oct 27 Dec 15
Jan 26
'16
2016 +2.88% +2.80% +2.84% +2.81% +2.78% +2.70% +2.64% +2.60% +2.45% 2.17%
2017 +2.43% 2.31%
+2.88%
+2.80%
+2.84%
+2.81%
+2.78%
+2.70%
+2.64% +2.60%
+2.45%
2.17%
+2.43%
2.31%
2.1%
2.2%
2.3%
2.4%
2.5%
2.6%
2.7%
2.8%
2.9%
3.0%
2016 2017
CNBC Fed Survey – January 26, 2016 Page 15 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
14. What is your forecast for the year-over-year percentage change in the headline U.S. CPI for …?
2.17%
2.07% 2.08%
1.96%
2.17%
2.17%
1.89%
1.75%
1.88%
1.50%
2.12%
2.07%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2.2%
2.4%
Dec 16 Jan 27,
'15
Mar 17 April 28 Jun 16 Jul 28 Sept 16 Oct 27 Dec 15 Jan 26
'16
Survey Dates
2016 2017
CNBC Fed Survey – January 26, 2016 Page 16 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
15. When do you expect the Fed to allow its balance sheet to decline?
Survey Date Balance Sheet
Average Forecast
April 28, 2014 survey October 2015
June 4 survey March 2016
July 29 survey December 2015
September 16 survey December 2015
October 28 survey January 2016
December 16 survey February 2016
Jan. 27, 2015 survey April 2016
March 17 survey April 2016
April 28 survey May 2016
June 16 survey July 2016
July 28 survey June 2016
August 25 survey September 2016
September 16 survey August 2016
October 27 survey November 2016
December 15 survey December 2016
Jan. 26, 2016 survey February 2017
CNBC Fed Survey – January 26, 2016 Page 17 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
16. How would you characterize the Fed's monetary
policy?
28%
49%
46%
49%
44%
39%
50%
54%
50%
60%
54%
64%
49%
36%
43%
43%
49%
43%
49% 50%
47%
32%
44%
35%
47%
32%
23%
33%
46%
17%
6%
3% 3% 3%
6% 5% 6% 4%
8%
8%
13%
13%
3%
3%
6% 5% 6%
3%
8%
6%
3%
10%
5%
10%
5%
0%
10%
20%
30%
40%
50%
60%
70%
Jul 31,
'12
Jul 29,
'14
Aug
20
Sep 16Oct 28Dec 16 Jan
27, '15
Mar 17Apr 28Jun 16 Jul 28 Sept
16
Oct 27Dec 15Jan 26
'16
Too accommodative Just right Too restrictive Don't know/unsure
Too accomodative
Don't know/unsure
Too restrictive
Just right
CNBC Fed Survey – January 26, 2016 Page 18 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
17. The Federal Reserve's December interest rate hike was:
(For those answering “a mistake”) Why was it a mistake?
“Other” answer: All the above. But also and MOSTLY because it made no sense. The Fed
had not met its own minimal objectives for a rate hike but instead chose to LIE about it. NO WAY
inflation was on a path to 2% with the dollar strong and oil plummeting. The Fed lost a lot of
credibility with that move.
15%
80%
5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
A mistake The right move Don't know/unsure
33%
50%
17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Negative effect on stocks Negative effect oneconomic growth
Other
CNBC Fed Survey – January 26, 2016 Page 19 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
18. How will lower oil prices affect your GDP growth forecast for 2016?
23%
31%
33%
13%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Reduce growth
Increase growth
Have no effect on growth
Don't know/unsure
Average increase: 0.3 percentage points
Average reduction:
0.5 percentage points
CNBC Fed Survey – January 26, 2016 Page 20 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
19. How will lower oil prices affect your core CPI forecast for 2016?
64%
5%
31%
0%
0% 10% 20% 30% 40% 50% 60% 70%
Reduce inflation
Increase inflation
Have no effect oninflation
Don't know/unsure
Average increase: 0.4 percentage points
Average reduction:
0.4 percentage points
CNBC Fed Survey – January 26, 2016 Page 21 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
20. What is the single biggest threat facing the U.S. economic recovery?
“Other” responses:
Faster wage growth against backdrop
of low productivity squeezing profit
margins
Fear and cowardice on the part of the
American people, oh, and Donald
Trump
Fed
Secular changes in consumption and
debt tolerance
The Fed
Decelerating monetary aggregates
Lower than expected business sales
Policy mistake here or abroad
Fed having to continue raising
interest rates even though real GDP
growth remains near 2.5%-ish
because wages and core CPI inflation
continue to rise
Survey
Date European r
ecessio
n/
financia
l cris
is
Tax/
regula
tory p
olicie
s
Slo
w j
ob g
row
th
Inflation
Deflation
Debt
ceilin
g
Ris
e in inte
rest
rate
s
Geopolitical ris
ks
Glo
bal econ w
eakness
Slo
w w
age g
row
th
Terroris
t att
acks in t
he
U.S
.
Oth
er
Don't k
now
/
unsure
Apr 30 20% 31% 20% 0% 2% 2% 11% 0%
Jun 18 15% 28% 20% 3% 3% 0% 13% 0%
Jul 30 8% 30% 22% 0% 2% 2% 10% 14% 4%
Sep 17 4% 27% 22% 2% 0% 4% 18% 7% 2%
Oct 29 8% 29% 24% 3% 3% 3% 8% 13% 0%
Dec 17 5% 32% 29% 2% 0% 2% 15% 2% 2%
Jan 28 '14 7% 21% 30% 2% 0% 0% 12% 21% 0%
Mar 18 10% 23% 26% 3% 5% 0% 5% 18% 0%
Apr 28 3% 26% 21% 3% 5% 0% 8% 18% 13% 0%
Jul 29 12% 29% 12% 6% 3% 0% 12% 12% 12% 3%
Sep 16 6% 26% 29% 6% 3% 0% 6% 11% 11% 3%
Oct 28 31% 18% 15% 3% 3% 0% 10% 8% 8% 3%
Dec 16 40% 14% 14% 3% 6% 0% 3% 14% 3% 0%
Jan 27 '15 0% 13% 9% 0% 0% 0% 6% 16% 41% 6% 16% 0%
Mar 17 6% 14% 0% 3% 6% 0% 6% 8% 28% 17% 14% 0%
April 28 3% 11% 8% 3% 0% 0% 6% 11% 28% 8% 19% 3%
Jun 16 3% 17% 3% 0% 0% 0% 14% 25% 22% 6% 11% 0%
Jul 28 6% 21% 9% 0% 0% 0% 12% 6% 29% 9% 9% 0%
Sept 16 0% 16% 2% 0% 4% 0% 0% 8% 45% 8% 14% 2%
Oct 27 0% 8% 5% 3% 8% 0% 8% 13% 41% 10% 5% 0%
Dec 15 0% 10% 5% 0% 0% 0% 8% 10% 44% 5% 3% 15% 0%
Jan 26 '16 0% 10% 5% 0% 3% 0% 0% 5% 44% 8% 0% 23% 3%
CNBC Fed Survey – January 26, 2016 Page 22 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
21. In the next 12 months, what percent probability do you place on the U.S. entering recession? (0%=No chance of recession, 100%=Certainty of recession)
Aug11,'11
Sep
19
Oct
31
Jan23,'12
Mar
16
Apr
24
Jul
31
Sep
12
Dec
11
Jan29,'13
Mar
19
Apr
30
Jun
18
Jul
30
Sep
6
Oct
29
Dec
17
Jan28'14
Mar
18
Apr
28
Jul
29
Sep
16
Oct
28
Dec
16
Jan27'15
Mar
17
April
28
Jun
16
Jul
28
Sept
16
Oct
27
Dec
15
Jan15'16
Jan
26
Series1 34.0 36.1 25.5 20.3 19.1 20.6 25.9 26.0 28.5 20.4 17.6 18.2 15.2 16.2 16.9 18.4 17.3 15.3 16.9 14.6 16.2 15.0 15.1 13.6 13.0 16.4 14.7 15.1 17.4 18.6 22.1 22.9 28.8 24.1
34.0%
36.1%
25.5%
20.3%
19.1%
20.6%
25.9%
26.0%
28.5%
20.4%
17.6%
18.2%
15.2%
16.2% 16.9%
18.4%
17.3%
15.3%
16.9%
14.6%
16.2%
15.0%
15.1%
13.6% 13.0%
16.4%
14.7%
15.1%
17.4%
18.6%
22.1%
22.9%
28.8%
24.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Survey Dates
CNBC Fed Survey – January 26, 2016 Page 23 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
22. What is your primary area of interest?
Comments: Marshall Acuff, Silvercrest Asset Management: The principal headwind for US stocks has been and will continue to be declining
earnings growth expectations in a market that continues to be fair to fully valued. John Augustine, The Huntington National Bank: The 4-Cs for
stocks to stabilize - traction in commodity prices, confidence, corporate profits and currencies. Jim Bianco, Bianco Research: Famously the markets have
predicted 9 of the last 5 recessions. This is a better record than economists! Pay attention to markets.
Economics
48%
Equities 25%
Fixed Income
13%
Currencies
0% Other 15%
CNBC Fed Survey – January 26, 2016 Page 24 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
Robert Brusca, Fact and Opinion Economics: Depressing dilly of a monetary policy. Fed is dogmatic and not at all keeping its eye on the bouncing ball of growth and of changing fortunes. The Fed has decided already that we will, WILL, have mean reversion as it is
simply TIME for things to get back to normal so they will and monetary policy will tighten to anticipate that event. What a screwed up bit of arrogance from the Fed after being so clueless all recovery long and about the oncoming recession itself. In my view, the new
regulations on banks implemented by using stress tests on banks are so different and so highly restrictive bank lending is not going to do anything like fostering inflation for a very long time, if ever. Normalcy is gone forever. Instead we have this whatever you want
to call it. The Fed itself has become the biggest risk to growth. Thomas Costerg, Standard Chartered Bank: In December the Fed probably intended to hike rates again in March, but they
probably did not expect such market volatility. The Fed is very sensitive to market sentiment and a sharp increase in the VIX could delay the next hike. March remains our main scenario; the VIX index will be key. The risk of a recession remains quite high as financial
conditions are tightening and lower oil prices are now mostly a negative. The Fed may end up cutting rates sooner than widely expected, in our view. (We expect the Fed to be back at near zero
levels by March 2017) John Donaldson, Haverford Trust Co.: A second Fed move was never likely for this meeting. The market volatility has taken March
off the table as well. Perhaps June for the second move.
CNBC Fed Survey – January 26, 2016 Page 25 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
Neil Dutta, Renaissance Macro Research: In 2015, core inflation was broadly stable despite a rapid appreciation in the dollar exchange rate and collapse in energy prices. Thus, as these factors abate, core inflation has room to accelerate in 2016. The recent sell
off in risk assets undoubtedly complicates the Fed's tightening plans. However, any delay is likely to be tactical given the broad set of macro-economic conditions that are in place. After all, the unemployment rate is 5.0% with core inflation moving to target.
We would be surprised if the Fed hiked only once or twice in 2016. Three or four hikes appears to be a reasonable baseline path. Mike Englund, Action Economics: The longer-term Fed policy
outlook shouldn't be changing daily with daily changes in stock prices. Only changes in underlying fundamentals should drive the longer-term policy outlook, and there is little evidence that the stock market sell-off is being driven by deteriorating fundamentals.
Stuart Hoffman, PNC Financial Services Group: In the past 35 years, stock market "corrections" (10+% declines) predicted 21 of the last 5 recessions!
Art Hogan, Wunderlich Securities: This is not 2008 and the sooner we stop that analogy the better off markets will be. We are
going through a normal market correction, not a financial crisis. John Kattar, Ardent Asset Advisors: The Fed's decision to gradually normalize policy is the right one, despite recent
dislocations in markets. However, I think that the transition would be easier if the Fed shifted its focus from rates to the balance sheet. Given the cumulative effects of QE, managing rates is awkward and only possible with blunt tools like massive reverse repos and the
IOER.
CNBC Fed Survey – January 26, 2016 Page 26 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
David Kotok, Cumberland Advisors: The Italian banking system is in crisis. That is driving market risk. So is the high-yield meltdown. China is only one factor. Oil is reaching levels of entry and transmission of low oil to growth takes about a year.
Subodh Kumar, Subodh Kumar & Associates: In addition to evolving central bank policy, other considerations emerge. Recent challenges persist whether closer to one end of the spectrum like
China with a managed economy or closer to the other like the United States with a freer economy. Geopolitical issues remain, including the U.S election. In the markets, the rise in junk and emerging market bond yields continues, reflecting marked increases in
leverage over the last cycle. In equities, rebalancing between value and erstwhile momentum fervor is taking place. Market behavior looks classical to us. More focus has emerged now in the markets on our long held favor for focus on quality of delivery and financial
structure. Globally, change in equity market leadership is likely to come from U.S. markets first and then, as is classical, once global growth is firmly established, flow into emerging markets. Other markets would be in between with rotation dependent on growth
delivery. Sector wise, the financials are likely to be crucial to change in the markets.
Guy LeBas, Janney Montgomery Scott: The Fed isn't "supposed" to consider a market selloff in its mission--unless that selloff causes tighter credit conditions (it is somewhat) or reflects weaker market participants' expectations for the economy (it may be). We can no
longer ignore the prospect that the risk asset selloff represents a prediction of deteriorating US economic growth or recession 6 - 12 months down the road.
John Lonski, Moody's: Persistently wide high-yield bond spreads might yet reduce access to affordable business credit.
CNBC Fed Survey – January 26, 2016 Page 27 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
Ward McCarthy, Jefferies: China is a bigger threat to US inflation than it is to US growth. Rob Morgan, Sethi Financial Group: The Fed says they'll raise
rates 4 times this year and I believe them. US job growth is accelerating and inflation is coming into the Fed's desired band. The desire by the Fed to have ammo to fight the next recession - higher rates -will trump concerns over the recent stock market correction.
Joel Naroff, Naroff Economic Advisors: This too shall pass and when it does, the markets, especially Treasuries, will rebound as more realistic growth estimates are factored into earnings
projections. James Paulsen, Wells Capital Management: It is still a long time until the March Fed meeting. Should the financial market stabilize
(even at a lower level) and US economic growth reports remain okay, I believe the Fed will still raise rates at the March meeting and indicate it is still on the path of 4 hikes during 2016. Core consumer price inflation and wage inflation are likely to keep rising should US
real GDP growth remain in the 2.25% to 2.75% range, forcing the Fed to keep raising interest rates.
Lynn Reaser, Point Loma Nazarene University: Financial markets have started off 2016 with a major case of the flu, which is threatening to spread from business to consumers to the Fed. While painful, some downtime was probably necessary and is unlikely to
develop into pneumonia or a bear market and recession.
CNBC Fed Survey – January 26, 2016 Page 28 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
John Roberts, Hilliard Lyons: We see 2016 as a "Tale of two markets," with a significant early year sell-off--potentially of bear market magnitude--driven by earnings shortfalls, low oil prices and general global economic weakness, reversing in a bull market second
half, as oil prices begin to rise, and earnings surprises reverse to the upside and markets move up significantly as investors anticipate an improving pricing environment for the commodity and energy complexes in 2017.
Merrill Ross, Wunderlich: US monetary policy is not going to be effective until there is greater synchronicity in global markets. The US, like Norway, Canada, Japan and other countries, will be unable
to achieve escape velocity and will be back at the zero bound before the target rate is at 3%. Chris Rupkey, Bank of Tokyo-Mitsubishi: I privately feel we are
all doomed, despite my sunny economic forecast. Build a panic room. John Ryding, RDQ Economics: Recent volatility in markets is
contagion but the disease is unclear. Lower oil prices are first negative for growth and then positive. China's market is deflation of a bubble. We see nothing fundamental in market dips and expect
the Fed to look through this in March. Allen Sinai, Decision Economics: Financial turmoil and stock market swoon are overdone, especially with additional policy
stimulus to come from outside the U.S. Hank Smith, Haverford Investments: More than ever the US economy needs corporate tax reform and regulatory relief (so too
Europe). Alas that won't happen this year...maybe '17?
CNBC Fed Survey – January 26, 2016 Page 29 of 29
FED SURVEY January 26, 2016
FED SURVEY April 30,
Peter Tanous, Lynx Investment Advisory: We have recently been in the third-longest bull market in history. Bull markets end. Get used to it.
Scott Wren, Wells Fargo Investment Institute: In our opinion, the recent correction is based on fear, not fundamentals. The modest growth/modest inflation environment of the last 5 years should continue throughout this year and into next. We do not see
the U.S. economy slipping into recession and see stocks higher over the next 12-month period. This correction is an opportunity for retail investors who can look through the nearer term volatility and take a 12+ month outlook.