CNBC Fed Survey, June 14, 2016

7/26/2019 CNBC Fed Survey, June 14, 2016

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CNBC Fed Survey June 14, 2016Page 1 of 34

FED SURVEYJune 14, 2016

These survey results represent the opinions of 41 of the nations top money managers,

investment strategists, and professional economists.

They responded to CNBCs invitation to participate in our online survey. Their responses werecollected on June 9-11, 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 thosewho did accept our invitation.

1.

At its June 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


2/34



(For those answering rates would be kept unchanged at theJune meeting) What is the main reason the Fed will keep

rates unchanged at its June meeting?

Other:

Because they will be downgrading

their GDP projections at this meeting

They were never going to anyway

Uncertain about economy's strength

Weak April and May jobs

Were prepping the market for a July

hike prior to the May employment

report

Yellen foot-dragging

50%

13%

15%

5%

18%

0%

0% 10% 20% 30% 40% 50% 60%

Weak May jobs

report

Uncertainty

surroundingBrexit vote

Global growthconcerns

Marketsunprepared for

rate hike

Other

Don't

know/unsure


3/34



After this monthsmeeting, the Federal Reserve's nextmove will most likely be:

88%

10%

0%

3%

90%

10%

0%

0%

94%

4%

0%

2%

95%

3%

0%

3%

0% 20% 40% 60% 80% 100%

Raise interest rates

Lower interest rates

Move to negative interest rates

Launch new quantitative easing

Jan 27 Mar 15 Apr 26 Jun 14


4/34



When will the Federal Reserve make its next move?

Jan 27 Survey March 15 Survey April 26 Survey June 14 Survey

For

those

who

said:

Average

month:

For

those

who

said:

Average

month:

For

those

who

said:

Average

month:

For

those

who

said:

Average

month:

Raise

interest

rates

(88%)

May

2016

Raise

interest

rates

(90%)

June

2016

Raise

interest

rates

(94%)

August

2016

Raise

interest

rates

(95%)

Sept

2016

Lower

interest

rates

(10%)

August

2016

Lower

interest

rates

(10%)

October

2016

Lower

interest

rates

(4%)

Sept

2016

Lower

interest

rates

(3%)

October

2016

Move to

negative

interest

rates

(0%)

--

Move to

negative

interest

rates

(0%)

--

Move to

negative

interest

rates

(0%)

--

Move to

negative

interest

rates

(0%)

--

Launch

newquant.

easing

(3%)

April

2016

Launch

newquant.

easing

(0%)

--

Launch

newquant.

easing

(2%)

Dec

2016

Launch

newquant.

easing

(3%)

March

2017


5/34



2.How many times will the Federal Reserve hike rates thisyear (2016)?

2.8

2.1

1.9

1.6 1.5

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Dec 15 '15 Jan 26 '16 Mar 15 Apr 26 Jun 14

Survey Dates


6/34



3.The current presidential campaign is:

5%

56%

39%

2%

61%

37%

3%

58%

40%

0%

10%

20%

30%

40%

50%

60%

70%

Positive for the

economic outlook

Negative for the

economic outlook

Having no effect on

the economic outlook

Mar 15 Apr 26 Jun 14


7/34



4.Which would be the best presidential election outcomefor the economy?

18%

9%

23%

40%

30%

35%

26%

24%

28%

16%

37%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


A Democrat wins A Republican wins

Doesn't matter Don't know/unsure

Republican Wins

Doesn't matter

Democrat wins

Don't know/unsure


8/34



5.Which candidate has best economic policies?

30%

45%

25%

0%

10%

20%

30%

40%

50%

60%

Clinton Trump Don't know/unsure


9/34



Which candidate would be best for the stock market?

38%

25%

38%

0%

10%

20%

30%

40%

50%

60%



10/34



6.Who is most likely to win this year's presidentialelection?

80%

13%

7%

80%

15%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


Apr 26 Jun 14


11/34



In the wake of the November presidential election,protectionist trade policies ...

13%

53%

33%

0%

3%

0% 10% 20% 30% 40% 50% 60%

Will be

enactedregardless of

who wins

Won't be

enactedregardless of

who wins

Will be

enacted onlyif Donald

Trump wins

Will be

enacted onlyif Hillary

Clinton wins

Don't

know/unsure


12/34



7.Where do you expect the S&P 500 stock index will be on ?

23112296

22472259

2293

2254

2159

2166

2140

2000

2035

2088

2114

2149

2223

2107

2158

2200

22342244

1,800

1,850

1,900

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2,300

2,350

Dec16

Jan27

'15

Mar17

April28

Jun16

Jul28

Sept16

Oct27

Dec15

Jan15

'16

Jan26

Mar15

Apr26

Jun14

Survey Dates

December 31, 2016 December 31, 2017


13/34



8.

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%

2.34%

2.11% 2.10%

3.09%

2.88%

2.83%

2.58%2.54%

2.0%

2.5%

3.0%

3.5%

4.0%

Dec16

Jan27

'15

Mar17

April28

Jul 16Jul 28 Sept16

Oct27

Dec15

Jan26

'16

Mar15

Apr26

Jun14

Survey Dates

December 31, 2016 December 31, 2017


14/34



9.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%

0.84%

0.78%

0.74%

1.61%1.61%1.62%

1.60%

1.43%

1.49%

2.07%

2.17%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Dec 31, 2016 Dec 31, 2017 Dec 31, 2018


15/34



10. At what fed funds level will the Federal Reserve stophiking 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%

2.73%

2.65%

2.64%

2.0%

2.5%

3.0%

3.5%

4.0%

Survey Dates


16/34



11. When do you believe fed funds will reach itsterminal 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

Mar 15 survey Q3 2018

Apr 26 survey Q4 2018

Jun 14 survey Q4 2018


17/34



12. What is your forecast for the year-over-yearpercentage 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% +2.14% +1.95% +2.05%

2017 +2.43% +2.31% +2.41% +2.21% +2.25%

+2.88%

+2.80%

+2.84%+2.81%

+2.78%

+2.70%

+2.64%

+2.60%

+2.45%

+2.17%

+2.14%

+1.95%

+2.05%

+2.43%

+2.31%

+2.41%

+2.21%

+2.25%

1.6%

1.8%

2.0%

2.2%

2.4%

2.6%

2.8%

3.0%

2016 2017


18/34



13. What is your forecast for the year-over-yearpercentage 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%

1.72%

1.66%

1.75%

2.12%

2.07%

2.24%

2.13%

2.20%

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

Mar

15

Apr

26

Jun

14

Survey Dates

2016 2017


19/34



14. When do you expect the Fed to allow its balancesheet to decline?

0%

0%

0%

3%

0%

0%

5%

10%

0%

8%

3%

5%

63%

5%

0% 10% 20% 30% 40% 50% 60% 70%

Jun '16

Jul '16

Aug '16

Sep '16

Oct '16

Nov '16

Dec '16

Jan '17

Feb '17

Mar '17

Apr '17

May '17

After May '17

Never


20/34



15. What is the single biggest threat facing the U.S.economic recovery?

Other responses: Fear itself

Inadequate monetary stimulus as

reflected in weak nominal GDP

growth

Squeezed profit margins

Slow global growth due to slower

productivity/lab force growth

Survey

Date Europeanrecession/

financialcrisis

Tax/

regulatorypolicies

Slow

jobgrowth

Inflation

Deflation

Debtceiling

Riseininterestrates

Geopoliticalrisks

Globaleconweakness

Slow

wagegrowth

Terroristattacksinthe

U.S.

OutcomeofUS

presidentialelection

Protectionisttrade

policies

Other

Don'tknow/

n s e

Apr 30 20% 31% 20% 0% 2% 2% 11%

Jun 18 15% 28% 20% 3% 3% 0% 13%

Jul 30 8% 30% 22% 0% 2% 2% 10% 14% Sep 17 4% 27% 22% 2% 0% 4% 18% 7%

Oct 29 8% 29% 24% 3% 3% 3% 8% 13%

Dec 17 5% 32% 29% 2% 0% 2% 15% 2%

Jan 28 '14 7% 21% 30% 2% 0% 0% 12% 21%

Mar 18 10% 23% 26% 3% 5% 0% 5% 18%

Apr 28 3% 26% 21% 3% 5% 0% 8% 18% 13%

Jul 29 12% 29% 12% 6% 3% 0% 12% 12% 12%

Sep 16 6% 26% 29% 6% 3% 0% 6% 11% 11%

Oct 28 31% 18% 15% 3% 3% 0% 10% 8% 8%

Dec 16 40% 14% 14% 3% 6% 0% 3% 14% 3%

Jan 27 '15 0% 13% 9% 0% 0% 0% 6% 16% 41% 6% 16%

Mar 17 6% 14% 0% 3% 6% 0% 6% 8% 28% 17% 14% 0April 28 3% 11% 8% 3% 0% 0% 6% 11% 28% 8% 19%

Jun 16 3% 17% 3% 0% 0% 0% 14% 25% 22% 6% 11%

Jul 28 6% 21% 9% 0% 0% 0% 12% 6% 29% 9% 9%

Sept 16 0% 16% 2% 0% 4% 0% 0% 8% 45% 8% 14%

Oct 27 0% 8% 5% 3% 8% 0% 8% 13% 41% 10% 5%

Dec 15 0% 10% 5% 0% 0% 0% 8% 10% 44% 5% 3% 15%

Jan 26 '16 0% 10% 5% 0% 3% 0% 0% 5% 44% 8% 0% 23%

Mar 15 5% 21% 3% 0% 0% 0% 5% 5% 33% 5% 0% 3% 21%

Apr 26 0% 22% 2% 2% 2% 0% 0% 7% 36% 9% 0% 7% 11%

Jun 14 0% 28% 5% 3% 0% 0% 25% 0% 28% 8% 0% 5% 13% 10%


21/34



16. In the next 12 months, what percent probability doyou place on the U.S. entering recession? (0%=No

chance of recession, 100%=Certainty of recession)

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%

24.4%

21.1%

23.5

10%

15%

20%

25%

30%

35%

40%

Aug11,'1

1

Sep1

9

Oct3

1

Jan23,'1

2

Mar1

6

Apr2

4

Jul3

1

Sep1

2

Dec1

1

Jan29,'1

3

Mar1

9

Apr3

0

Jun1

8

Jul3

0

Sep

6

Oct2

9

Dec1

7

Jan28'1

4

Mar1

8

Apr2

8

Jul2

9

Sep1

6

Oct2

8

Dec1

6

Jan27'1

5

Mar1

7

April2

8

Jun1

6

Jul2

8

Sept1

6

Oct2

7

Dec1

5

Jan15'1

6

Jan2

6

Mar1

5

Apr2

6

Jun1

4

Survey Dates


22/34



17. Which of the following is the best explanation of theweak May jobs report?

55%

35%

10%

0%

10%

20%

30%

40%

50%

60%

Statistical blip not

reflective of the trend

Beginning of a trend

of lower job growth

Don't know/unsure


23/34



18. Which of the following factors do you believe isdepressing job growth now? (Select all that apply)

Other:

Affordable Care Act

Higher wages are making employers

more selective

Lagged effects of Fed's 2014-15

threat to raise interest rates Skills mismatch

We have just been through a mini-

recession

Current/anticipated aggregate

demand does not support adding

meaningful numbers of new

employees and hiking wages. Labor

market is not tight.

Lack of warm qualified bodies

Lower commodity prices

Rise of automation destroying manyjobs

Skills mismatch as well as normal

slowdown after rapid growth past 6

years

Weak foreign growth

58%

40%

28%

28%

15%

13%

0%

0% 10% 20% 30% 40% 50% 60% 70%

Employers uncertain about future

growth

Economy at full employment

Higher minimum wages

Other

Productivity beginning to rise

Election uncertainty

Don't know/unsure


24/34



19. Relative to an economy operating at full capacity,what best describes your view of the amount of resource

slack in the U.S. right now for labor?

Jul 29

14 Aug 20 Sep 16 Oct 28 Dec 16

Jan 27

'15

Mar

17 Apr 28 Jun 16 Jul 28

Jun 14

'16

Considerably more slack now 48% 34% 20% 18% 16% 16% 13% 6% 5% 12% 10%

Modestly more slack now 36% 40% 60% 69% 55% 50% 63% 64% 54% 47% 43%

No difference 4% 6% 3% 0% 0% 6% 11% 0% 15% 9% 15%

Modestly less slack now 8% 11% 6% 5% 24% 19% 11% 22% 15% 24% 23%

Considerably less slack now 4% 9% 9% 8% 5% 9% 3% 8% 10% 9% 10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Modestly less slack

Modestly more slack

Considerably less slack

No difference

Considerably more slack


25/34



Relative to an economy operating at full capacity, what bestdescribes your view of the amount of resource slack in the

U.S. right now for production capacity?

Jul 29

'14 Aug 20 Sep 16 Oct 28 Dec 16

Jan 27

'15

Mar

17 Apr 28 Jun 16 Jul 28

Jun 14

'16

Considerably more slack now 12% 9% 8% 8% 8% 0% 14% 8% 10% 21% 20%Modestly more slack now 56% 60% 64% 64% 55% 59% 57% 57% 62% 38% 55%

No difference 8% 14% 8% 15% 13% 19% 14% 5% 8% 15% 10%

Modestly less slack now 16% 9% 14% 8% 24% 13% 11% 19% 13% 21% 13%

Considerably less slack now 4% 9% 3% 5% 0% 9% 5% 11% 8% 6% 3%

0%

10%

20%

30%

40%

50%

60%

70%

No difference

Modestly more slack

Modestly less slack

Considerably less slack

Considerably more slack


26/34



20. When it comes to the effect on policy for each of thefollowing factors, do you believe the Federal Reserve

pays too much attention, pays the right amount ofattention, or doesn't pay enough attention?

50%

40%

70%

45%

50%

23%

5%10% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Latest high-frequency

data, such as the mostrecent jobs or

inflation report

Intl economic and

financialdevelopments

Market reactions to

monetary policy

Pays too much attention Pays the right amount of attention Doesn't pay enough attention


27/34



21. When it comes to comparing the effect on policybetween now and 10 years ago for each of the following

factors, do you believe the Federal Reserve pays moreattention now, the same amount of attention, or lessattention now?

53%

75% 78%

43%

25% 20%

5% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Latest high-frequencydata, such as the most

recent jobs orinflation report

Intl economic andfinancial

developments

Market reactions tomonetary policy

Pays more attention now Pays the same amount of attention now Pass less attention now


28/34



22. What is your primary area of interest?

Comments:

Marshall Acuff, Silvercrest Asset Management: The Fed should

be economic data driven and let the markets respond accordingly.Furthermore there continues to be too many Fed governors voicinganticipatory opinions about future Fed actions before all theeconomic data is reported in front of a pending Fed meeting.Continuing such conduct could eventually jeopardize the credibility ofthe Fed.

Jim Bianco, Bianco Research: Biggest Issue of the year is BRexit.While I do not expect "leave" (the EU) to happen, if leave does

prevail, it is a game changer. It would mark the beginning of theend of the EU/Euro and a dangerous rise in protectionist policies.

Economics

51%

Equities20%

FixedIncome

10%

Currencies0%

Other20%


29/34



Peter Boockvar, The Lindsey Group: The Fed has so bungledtheir exit from this extraordinary experiment that they better hope

the recent rise in commodity prices is just a blip because if it's forreal at the same time services inflation stays high, they are in deeps**t.

Robert Brusca, Fact and Opinion Economics: The Fedsproblemis it tracks the economy using the WRONG paradigm. It is as thoughthe US economy has been TRANSFORMED into a SMALL OPENeconomy and is a price taker in world markets rather than a largesomewhat Open economy as in the past. This means that the US

does not set global wages and prices, let alone its own. They are setin foreign markets. That makes US macro statistics less important toactual US economic outcomes and the value of the dollar muchMORE important. The Fed's usage or framing of policy as focused onlabor and wages in a highly Keynesian framework is quaint. The Fedneeds to THINK MORE about why certain policies do not work andwhy the Phillips curve seems to have evaporated instead of makingpolicy like everything is still the same. It isn't. International marketsand events are much more important than the Fed seems to

recognize or to admit.

John Donaldson, Haverford Trust Co.: When you look at thedetail in the jobs report, the weakness is concentrated in oil & gas,mining, and the support activities for those industries. That supportcategory has been particularly weak in spring months where thehistorical data has shown seasonal strength.

Neil Dutta, Renaissance Macro Research: The upcoming British

referendum was a strong enough reason to delay a hike in June. Thelatest payroll figures lower the sense of urgency to hike in July. Thatsaid, the rationale for gradual rate hikes remains strong and oursense is the market has a tough time between the notions of slowhikes versus no hikes. Wage growth has picked up and thestabilization in the USD has helped the outlook for core inflation.


30/34



Mike Englund, Action Economics: The May payroll undershootpartly reflected a Verizon and weather hit that will be reversed in

June, hence setting up the fed for a July rate hike. Yet, it'sunfortunate that the Fed has talked itself into a spot where it needsto fit policy changes around data wiggles.

Robert Fry, Robert Fry Economics: The Fed should stop puttingso much weight on a single measure, the increase in nonfarmpayrolls. If you look at a broader sample of data (April personalconsumption expenditures and new home sales, house prices,various measures of labor costs, unemployment claims), it's hard to

justify not raising the federal funds rate.

Kevin Giddis, Raymond James Financial: The Fed remains in adifficult position. U.S. economic growth and inflation is moderatingenough to consider raising rates, but not enough to garner enoughsupport within its ranks or convince the market that doing so isprudent. Unfortunately, waiting is taking a toll on their creditability.

Art Hogan, Wunderlich Securities: It is very telling that the

market has been able to both accept the fact that the Fed will raiserates this year and that economic data is mixed at best. We are in afar better place today than we were this time last year.

John Kattar, Ardent Asset Advisors: There is absolutely noreason for the Fed to do anything prior to the election. Economicdata is tepid, inflation is subdued, and geopolitical risks such asBrexit loom.

Jack Kleinhenz, NRF Chief Economist: The pace of a Fed policychange and inflation are uncertain. Recent economic data has ingeneral been positive but solid economic data is required for a Fedhike in July. The weak May employment report and Brexit are issuesaffecting the near-term decision and later this year the presidentialelection will influence a late 2016 decision.


31/34



Subodh Kumar, Subodh Kumar & Associates: For endeavors,checks and balances work best to curb excess, including in capital

markets in the past in their relationship with central banks. Beingoverly enmeshed into following central banks can be seen again inthe capital market reactions to recent musing by the Federal ReserveChairman that interest rate increases need to take into account theeconomy. Currently, with apparently close to $10 trillion dollars ofsubzero sovereign debt having been issued worldwide and corporateshare buybacks in the United States at least running at record levelsfor several quarters, of concern to investors should be that suchcoopting builds in risks that appear not clearly understood. Assuming

steady state low risk seems to be a less preferable option forportfolios to diversifying across asset classes including cash andprecious metals as well as focusing on quality.

Guy LeBas, Janney Montgomery Scott: While a June rate hikewasn't a given, the May jobs report essentially took the option offthe table. While the number was a surprise, the reaction shouldn'tbe. The dollar has stopped rising and the stress fractures in China'scurrency peg have dissipated, which, ironically, gives FOMC

policymakers a little more room to hike exactly when the domesticeconomic data is warning that they perhaps shouldn't.

Donald Luskin, Trend Macrolytics: The Fed is so out of control itis destroying business confidence. They say they are "datadependent" but they come off like data junkies who flip-flop everytime some news release comes out. It's embarrassing.

Thom Melcher, PNC Asset Management Group: US economic

conditions are stable and modestly improving. Valuations are fairgiven the pace of growth. The Fed's next move will be to tighten,but they are not in a rush to do so.


32/34



Rob Morgan, Sethi Financial Group: The weak May jobs reporttakes a Fed hike off the table for the near term, and given the Fed's

propensity to leave rates unchanged near a presidential election, wewon't see a hike until December at the earliest.

Joel Naroff, Naroff Economic Advisors: The Fed needs to stoppaying so close attention to current data and might even stopindicating that they are data driven, as it too often refers to currentdata.

James Paulsen, Wells Capital Management: Currently, yield

structures that are nearing zero or below about the world arebecoming the biggest fear generator for private economic playersand investors. Perhaps more than ever, the Fed could have morepositive influence on private sector players' confidence by showingsome real world economic leadership and following through with arate increase in July.

Lynn Reaser, Point Loma Nazarene University: "Datadependent" policy can only work if current data is a good predictor of

the future. Unfortunately, it is not. The economy's performance insix months may look nothing like today's data, which means thatmonetary policy, which acts with a lag, may be significantly offcourse.

John Roberts, Hilliard Lyons: Continued high levels of negativecampaigning between the two major party candidates are unlikely tobe positive for the markets. Hopefully we will get some morepositive rhetoric and specific policy proposals from the minor party

candidates!

Merrill Ross, Wunderlich: We still have to consider that sluggishgrowth and the potential for deflation could be symptomatic ofsecular and demographic changes that are very difficult to overcome,and far beyond the influence of monetary policy.


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Chris Rupkey, Bank of Tokyo-Mitsubishi: Fed reluctance to liftrates back to normal is making companies, individuals and investors

and traders believe falsely that they cannot raise interest rates or itwill "break" the economy. The Fed's zero rate policy has cost saversbillions in lost real wealth. Bring back Greenspan, not sure why wethrew his measured pace rates normalization under the bus. Yellenvoted for his rate hikes, now she won't.

John Ryding, RDQ Economics: The Fed has consistentlyoverreacted to the latest payroll print (e.g. September 2013 andSeptember 2015). In addition, the Fed has paid too much attention

to short-term market volatility. Communication is unclear (datadependent but which data?) The Fed needs to rethink and clarify thebasis for policy decisions. Right now policy moves are very much inthe discretionary mode of operation.

Allen Sinai, Decision Economics: The U.S. economy is in a newphase of the business cycle: tight labor markets and the beginning ofwage-price pickup.

Hank Smith, Haverford Investments: The next president willhave an easy opportunity to accelerate GDP growth throughcorporate tax reform (where there is bipartisan support) andregulatory reform. Letshope they see the light!

Diane Swonk, Diane Swonk & Associates: The push to inhibittrade, close boarders, and up regulation across a board swath ofindustries are all a threat to growth in 2017. The only policy offset isthe realization by both sides of the aisle that corporate tax reform

could bring money home and increase our competitive advantage.The Fed is pretty much out of ways to stimulate short of a helicopterdrop, which could be its last move as an independent central bank ifit were to occur.


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Peter Tanous, Lynx Investment Advisory: Biggest concern is therising number of jobs disappearing due to automation. The case for a

guaranteed income is getting more interesting.

Mark Vitner, Wells Fargo: Financial market volatility will increaseahead of ANY meeting that the markets sense that the Fed is set toraise interest rates. The Fed needs to reset their expectations inregards to this.

Scott Wren, Wells Fargo Investment Institute: Investors arealready looking ahead to improved economic and earnings growth in

the second half of this year and in 2017. That is why we are only awhisper away from the all-time record high in the S&P 500. Whenthe current consolidation phase ends for the SPX we look for theindex to move higher and set new record highs in the second half ofthe year. It might not break through the May '15 intraday recordhigh the first 2 or 3 times it tries but we are convinced it will. Wewant our clients to stay invested and use downside volatility as abuying opportunity. Good, not great, equity returns over the next12-18 months.

Clare Zempel, Zempel Strategic: The failure of central banksworldwide to spur faster nominal growth, which reflects anunimaginative and misdirected focus on low interest rates, hastragically suppressed growth in incomes and fomented a xenophobicpolitical shift.

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CNBC Fed Survey, June 14, 2016

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