FED SURVEY

April 26, 2016

These survey results represent the opinions of 48 of the nations top money managers,
investment strategists, and professional economists.

FED SURVEY

They responded to CNBCs invitation to participate in our online survey. Their responses were
collected on April 21-23, 2016. Participants were not required to answer every question.

April 30,

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 April meeting, the Federal Reserve will:

0%

10%

Raise interest rates

0%

Lower interest rates

0%

20%

0%

CNBC Fed Survey April 26, 2016

Page 1 of 32

40%

50%

60%

70%

80%

90%

100%

100%

Keep rates unchanged

Don't know/unsure

30%

FED SURVEY
April 26, 2016
2. After this months meeting, the Federal Reserve's next
move will most likely be:

FED SURVEY

Jan 27

April 30,
0%

Mar 15
20%

Apr 26
40%

60%

80%

100%

88%
90%

Raise interest rates

94%

10%
10%

Lower interest rates

4%

0%
Move to negative interest rates

0%

0%

3%
Launch new quantitative easing

0%
2%

CNBC Fed Survey April 26, 2016

Page 2 of 32

FED SURVEY
April 26, 2016
When will the Federal Reserve make its next move?

FED SURVEY
April 30,
Jan 27 Survey
For those
who said:

Raise
interest
rates
(88%)

Lower
interest
rates
(10%)
Move to
negative
interest
rates
(0%)
Launch
new
quantitati
ve easing
(3%)

March 15 Survey

Average
month:

For those
who said:

May 2016

Raise
interest
rates
(90%)

August
2016

Lower
interest
rates
(10%)

--

Move to
negative
interest
rates
(0%)

April
2016

Launch
new
quantitati
ve easing
(0%)

CNBC Fed Survey April 26, 2016

Page 3 of 32

April 26 Survey

Average
month:

For those
who said:

Average
month:

June
2016

Raise
interest
rates
(94%)

August
2016

October
2016

Lower
interest
rates
(4%)

--

Move to
negative
interest
rates
(0%)

--

--

Launch
new
quantitati
ve easing
(2%)

December
2016

September

2016

FED SURVEY
April 26, 2016
3. How many times will the Federal Reserve hike rates this
year (2016)?

FED SURVEY

5.00

April 30,

4.50

4.00

3.50

2.8

3.00

2.50

2.1
1.9

2.00

1.6
1.50

1.00

0.50

0.00

Dec 15 '15

Jan 26 '16
Survey Dates

CNBC Fed Survey April 26, 2016

Page 4 of 32

Mar 15

Apr 26

FED SURVEY
April 26, 2016
4. The current presidential campaign is:

FED SURVEY

Mar 15

Apr 26

April 30,

70%

61%
60%

56%

50%

39%

40%

37%

30%

20%

10%

5%

2%
0%

Positive for the

economic outlook

Negative for the

economic outlook

CNBC Fed Survey April 26, 2016

Page 5 of 32

Having no effect on
the economic outlook

FED SURVEY
April 26, 2016
5. Which would be the best presidential election outcome
for the economy?

FED SURVEY
April 30,

Mar 15

Apr 26

45%

40%

40%

37%
35%

30%
30%

26%
24%

25%

20%

18%
16%

15%

10%

9%

5%

0%

A Democrat
wins

A Republican
wins

CNBC Fed Survey April 26, 2016

Page 6 of 32

Doesn't matter

Don't
know/unsure

FED SURVEY
April 26, 2016
6. Which candidate has best economic policies?

Mar 15

FED SURVEY
0%
April 30,

10%

Trump

50%

0%
2%

13%
4%

42%
48%

8%

Cruz

Don't
know/unsure

CNBC Fed Survey April 26, 2016

Page 7 of 32

40%

15%

Kasich

Rubio

30%

16%

Clinton

Sanders

20%

Apr 26

11%
13%

11%
17%

60%

FED SURVEY
April 26, 2016
Which candidate would be best for the stock market?

FED SURVEYMar 15
April0%30,

10%

20%

30%

0%
0%

14%
4%

35%

Kasich

50%

11%

Rubio

0%
11%

Don't
know/unsure

CNBC Fed Survey April 26, 2016

Page 8 of 32

50%

13%

Trump

Cruz

40%

22%

Clinton

Sanders

Apr 26

19%
22%

60%

FED SURVEY
April 26, 2016
7. Who is most likely to win this year's presidential
election?

FED SURVEY

90%

80%

April 30,
80%

70%

60%

50%

40%

30%

20%
13%
10%

7%
0%

0%

Clinton

Sanders

CNBC Fed Survey April 26, 2016

Page 9 of 32

Trump

0%

0%

Kasich

Cruz

Don't
know/unsure

FED SURVEY
April 26, 2016
8. Where do you expect the S&P 500 stock index will be on
?

FED SURVEY
December 31, 2016

December 31, 2017

April 30,
2,350

2311

2,300

2293

2296

2,250

2247

2259

2254

2200

2,200

2166

2,150

2234

2223
2158

2159

2114
2088

2140

2,100

2107
2035

2,050

2,000

2000
1,950

1,900

1,850

1,800
Dec Jan Mar
16 27 '15 17

April
28

Jun Jul 28 Sept

16
16

Oct
27

Survey Dates

CNBC Fed Survey April 26, 2016

Page 10 of 32

Dec Jan
Jan
15 15 '16 26

Mar
15

Apr
26

FED SURVEY
April 26, 2016
9. What do you expect the yield on the 10-year Treasury
note will be on ?

FED SURVEY
April 30,

December 31, 2016

December 31, 2017

4.0%

3.52%
3.5%

3.14%

3.0%

3.24%
3.17%

3.09%

3.04%

2.88%

2.89%

2.88%

2.83%

2.67%2.67%
2.58%

2.5%

2.51%

2.34%

2.11%

2.0%

Dec Jan 27 Mar

16
'15
17

April Jul 16 Jul 28 Sept Oct 27 Dec Jan 26 Mar Apr 26

28
16
15
'16
15
Survey Dates

CNBC Fed Survey April 26, 2016

Page 11 of 32

FED SURVEY
April 26, 2016
10.
Where do you expect the fed funds target rate will
be on ?

FED SURVEY Dec 31, 2017

Dec 31, 2016

Dec 31, 2018

April 30,

2.5%

Dec 31, 2018

2.07%

2.13%
1.99%

2.04%
1.93%

2.0%

1.84%

1.75%

1.61% 1.62%

1.56%

1.5%

1.61%

1.60%

1.41%

1.46%

1.43%
1.17%

1.12%

1.0%

0.88%
0.91% 0.90%
0.85%

0.78%
0.84%

0.5%

0.0%
Aug Sep Oct Dec Jan Mar April Jun Jul Aug Sept Oct Dec Jan Jan Mar Apr
20 16 28 16 27, 17 28 16 28 25 16 27 15 15 26 15 26
'15
'16

CNBC Fed Survey April 26, 2016

Page 12 of 32

FED SURVEY
April 26, 2016
11.
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%

3.17%
3.11%
3.04%

3.06%

3.0%

2.85%

2.98%

2.79%
2.69%
2.65%
2.58%

2.5%

2.73%

2.65%
2.56%

2.0%
Aug Sep Oct Dec Jan Mar Apr Jun Jul Aug Sept Oct Dec Jan Mar Apr
20 16 28 16 27, 17 28 16 28 25 16 27 15 26 15 26
'15
'16
Survey Dates

CNBC Fed Survey April 26, 2016

Page 13 of 32

FED SURVEY
April 26, 2016
12.
When do you believe fed funds will reach its
terminal rate?

FED SURVEY

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

April 30,

CNBC Fed Survey April 26, 2016

Page 14 of 32

FED SURVEY
April 26, 2016
13.
What is the neutral fed funds rate for the economy
right now:

FED SURVEY

25%

April 30,

20%

Average:
1.27%

15%

10%

5%

0%

Responses

CNBC Fed Survey April 26, 2016

Page 15 of 32

FED SURVEY
April 26, 2016
14.
What is your forecast for the year-over-year
percentage change in real U.S. GDP for ?

FED SURVEY
April 30,

2016

2017

3.0%
+2.88%

2.8%

+2.84%
+2.81%
+2.78%

+2.80%

+2.70%
+2.64%
+2.60%

2.6%

+2.43%

2.4%

+2.45%

+2.41%

+2.31%

2.2%

+2.17%

+2.21%

+2.14%

2.0%
+1.95%

1.8%

1.6%
Dec 16

Jan 27,
Mar 17 April 28 Jun 16
'15

Jul 28

Sept 16 Oct 27

Dec 15

Jan 26
'16

Mar 15

Apr 26

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%
2017

CNBC Fed Survey April 26, 2016

Page 16 of 32

+2.43% +2.31% +2.41% +2.21%

FED SURVEY
April 26, 2016
15.
What is your forecast for the year-over-year
percentage change in the headline U.S. CPI for ?

FED SURVEY
April 30,

2016

2017

2.4%

2.17%
2.24%

2.17%

2.2% 2.17%
2.07%2.08%

2.12%

2.13%

2.07%

2.0%
1.96%

1.89%

1.88%

1.8%
1.75%

1.72%
1.66%

1.6%

1.50%
1.4%

1.2%

1.0%
Dec
16

Jan
27,
'15

Mar
17

April Jun 16 Jul 28 Sept Oct 27 Dec Jan 26 Mar Apr 26

28
16
15
'16
15
Survey Dates

CNBC Fed Survey April 26, 2016

Page 17 of 32

FED SURVEY
April 26, 2016
16.
When do you expect the Fed to allow its balance
sheet to decline?

FED SURVEY

Survey
AprilDate
30,

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

March 15 survey

February 2017

April 26 survey

March 2017

CNBC Fed Survey April 26, 2016

Page 18 of 32

FED SURVEY
April 26, 2016
17.
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%

31%
28%
30%
27%
29%
32%
21%
23%
26%
29%
26%
18%
14%
13%
14%
11%
17%
21%
16%
8%
10%
10%
21%
22%

20%
20%
22%
22%
24%
29%
30%
26%
21%
12%
29%
15%
14%
9%
0%
8%
3%
9%
2%
5%
5%
5%
3%
2%

0%
3%
0%
2%
3%
2%
2%
3%
3%
6%
6%
3%
3%
0%
3%
3%
0%
0%
0%
3%
0%
0%
0%
2%

2%
3%
2%
0%
3%
0%
0%
5%
5%
3%
3%
3%
6%
0%
6%
0%
0%
0%
4%
8%
0%
3%
0%
2%

2%
0%
2%
4%
3%
2%
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%

18%
12%
11%
8%
14%
16%
8%
11%
25%
6%
8%
13%
10%
5%
5%
7%

Other responses:

Fear itself
Another collapse in oil price
Debt overhang / deleveraging
Slow demand for labor services (hours growth)

CNBC Fed Survey April 26, 2016

Page 19 of 32

41%
28%
28%
22%
29%
45%
41%
44%
44%
33%
36%

6%
17%
8%
6%
9%
8%
10%
5%
8%
5%
9%

3%
0%
0%
0%

3%
7%

11%
13%
14%
7%
13%
2%
21%
18%
13%
12%
11%
8%
3%
16%
14%
19%
11%
9%
14%
5%
15%
23%
21%
11%

Don't know/
unsure

Other

Outcome of US
presidential election

Terrorist attacks in the

U.S.

Slow wage growth

Global econ weakness

Geopolitical risks

Debt ceiling

Deflation

Inflation

Slow job growth

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

European recession/
financial crisis

April 30,

Rise in interest rates

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%

FED SURVEY
April 26, 2016
18.
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%

25.9%

24.4%

25.5%
22.9%

24.1%

22.1%

20%

20.6%
20.3%

20.4%

21.1%

18.4%

18.2%
19.1%
17.6%

16.9%

15%

18.6%

17.3%
16.9%
16.2%

16.2%
15.2%

16.4%

17.4%

15.1%
15.3%
15.0%
14.6%

15.1%
14.7%

13.6%
13.0%

10%

Aug
Jan
Sep Oct
Mar Apr
11,
23,
19 31
16 24
'11
'12

Jul
31

Jan
Sep Dec
Mar Apr Jun
29,
12 11
19 30 18
'13

Jul
30

Sep Oct Dec

6
29 17

Jan
Mar Apr
28
18 28
'14

Jul
29

Sep Oct Dec

16 28 16

Jan
Mar April Jun
27
17 28 16
'15

Jul Sept Oct Dec

28 16 27 15

Jan
Jan Mar Apr
15
26 15 26
'16

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 24.4 21.1

Survey Dates

CNBC Fed Survey April 26, 2016

Page 20 of 32

FED SURVEY
April 26, 2016
19.
Please rate the members of the Federal Open Market
Committee on a scale of 0 to 10, with 0 being the most
FED10SURVEY
dovish and
being the most hawkish.
April 30,
Dec 15
0

Charles L. Evans, Chicago

Janet L. Yellen, Board of Governors, Chair
Lael Brainard, Board of Governors
William C. Dudley, NY, Vice Chairman
Eric Rosengren, Boston

Daniel K. Tarullo, Board of Governors

Jerome H. Powell, Board of Governors
Neel Kashkari, Minneapolis
Robert S. Kaplan, Dallas
Stanley Fischer, Board of Governors

Patrick Harker, Philadelphia

James Bullard, St. Louis
Loretta J. Mester, Cleveland
Esther L. George, Kansas City

CNBC Fed Survey April 26, 2016

Page 21 of 32

Apr 26

2.33
2.76
3.69
3.03
2.91
3.11
3.26
3.20
3.18
3.46

3.76
3.73
4.47
4.81
4.97
5.30
5.09
5.53

5.64
6.53
5.88
6.28
6.71
7.47
7.68

10

FED SURVEY
April 26, 2016
20.
Thinking about the best way to make the US globally
competitive and also the needs for government revenue,
FED SURVEY
where should
the US set its top corporate tax rate?
April 30,
35%

30%

Average: 22.38%
25%

20%

15%

10%

5%

0%

CNBC Fed Survey April 26, 2016

Page 22 of 32

Responses sorted by size

FED SURVEY
April 26, 2016
21.
Which statement best reflects your views on
corporate tax inversions?

FED SURVEY

80%

April 30,
71%

70%

60%

50%

40%

30%

22%
20%

10%

7%

0%

Companies should
Companies
headquartered
in a
take whatever legal
actions they can to
nation have an
maximize their profits obligation to pay the
nations tax rate

CNBC Fed Survey April 26, 2016

Page 23 of 32

Don't know/unsure

FED SURVEY
April 26, 2016
22.
Which statement best describes your view on recent
actions taken by the US Treasury to stem inversions?

FED SURVEY

80%

April 30,

70%

67%

60%

50%

40%

30%

27%

20%

10%

7%

0%

Treasury changed the

Treasury did what
rules in the middle of was needed to protect
the game and thats
the US tax base
bad for business and
the economy

CNBC Fed Survey April 26, 2016

Page 24 of 32

Don't know/unsure

FED SURVEY
April 26, 2016
23.
Recently the US GDP has been weak, but job growth
has been strong. Which measure, jobs or GDP, gives the
FED SURVEY
best indication
of the strength and direction the US
April 30,
economy?
60%

49%

50%

38%

40%

30%

20%

9%

10%

4%
0%

Jobs

GDP

Other responses:

PMIs (Mfg production, non-mfg business activity)

Can't be separated
Percent of working age population employed
Corporate profits

CNBC Fed Survey April 26, 2016

Page 25 of 32

Other

Don't
know/unsure

FED SURVEY
April 26, 2016
24.

What is your primary area of interest?

FED SURVEY
April 30,
Currencies
0%

Other
18%

Fixed
Income
11%

Economics
51%

Equities
20%

Comments:
Jim Bianco, Bianco Research: Biggest wildcard is oil. A fall back
to $26 would trigger concerns about a "credit event" for banks and
lenders to the energy sector.
Robert Brusca, Fact and Opinion Economics: I cannot
understand why this Fed is so labor market centric in its analysis. I
get that it follows the unemployment rate as part of its dual
mandate. But the rhetoric linking inflation to the US rate of
unemployment (which is rising now) is peculiar Not all inflation is
cost-push. This tack encourages people to emphasize labor market
data more at a time that these data are being distorted by
demographics and hard economic times ( foreign competition and
technology-substitution). The failure of the Phillips Curve (genuflect!)
to work should shift the Fed away from this analysis instead of
'doubling up in the hole' (i.e. belief in mean reversion). Moreover,
look at the current low in claims --- plot the chart of claims levels VS
CNBC Fed Survey April 26, 2016
Page 26 of 32

FED SURVEY
April 26, 2016
the recession bands. YIKES!!! NOTE how few times recession occurs
longer than ONE YEAR after clams hit a cycle low. Last week's claims
FED since
SURVEY
low was the lowest
1973. It should make everybody nervous
April
30,expansion prospects. Have people forgotten
instead of joyful
about
all lessons from history??? Oh, the Fed is labor centric? Never mind.
Thomas Costerg, Standard Chartered Bank: Chair Yellen is
dovish and she continues to punch above her weight on the FOMC;
we also think she may be influenced by Governor Lael Brainard, who
is very sensitive about the US dollar. As a result, we do not think the
Fed will hike rates again. We think the December rate hike was "one
and done." We worry that US growth will slow further in the second
half of the year, pulled down by slowing car sales and construction.
John Donaldson, Haverford Trust Co.: The FOMC remains clear
on the message that they will be patient and far more willing to err
on the side of being too slow and needing to catch up rather than
moving too quickly and needing to reverse course.
Neil Dutta, Renaissance Macro Research: The Fed is pursuing a
policy of benign neglect with respect to inflation. Despite the firming
of prices in Q1, the recent drop in the broad dollar index, and
increase in commodity prices, the Fed sees somewhat lower core
inflation next year than previously. The Fed's willingness to ignore
the recent inflation pick-up suggests an increased willingness to
overshoot its inflation target. That is ultimately positive for risk
assets.
Robert Fry, Robert Fry Economics: Martin Feldstein taught me in
graduate school that the impact of interest rates on saving is
ambiguous. Low interest rates can force people to save MORE (and
consume less) to fund their retirements. I think that's happening
now. Rates are so low that they are reducing consumer spending,
especially among the elderly who put their savings in bank accounts
rather than stocks and bonds.
CNBC Fed Survey April 26, 2016
Page 27 of 32

FED SURVEY
April 26, 2016
Dennis Gartman, The Gartman Letter: If I have a concern it is
that the adjusted monetary base has been moving quietly, but
FED
SURVEY
disconcertingly
downward;
but worse, the portion of the base that is
April
30,component of M1 is rising and cash, as we
comprised of the
cash
know, or should know, is by definition deflationary for it is lost
entirely to the reserve banking system. This I find dismaying.
Art Hogan, Wunderlich Securities: The economy is doing better
than we get to hear about in the election cycle. The sky is falling
rhetoric will cease as soon as the election cycle is over.
Constance Hunter, KPMG LLP: The US economy is lackluster as is
corporate investment. This means more ho-hum growth in the U.S.
driven by consumption and housing investment. Its a 2.0% world;
we all need to consider Bullard's exercise of questioning if negative
and low rates have a perverse effect on inflation and in turn growth.
Jack Kleinhenz, NRF Chief Economist: Because of the softer than
expected consumer spending and weak industrial activity the Fed will
leave its benchmark unchanged in April. Expect a rate hike in June if
growth accelerates and inflation stays on upward track
David Kotok, Cumberland Advisors: Treasury changed rules in
the middle of the checker game. Why should any global company
HQ in the US after that? Treasury lost trust with the "inversion
affair."
Guy LeBas, Janney Montgomery Scott: The FOMC's job for April
is to talk up the possibility, not the probability, of future rate hikes
without causing the dollar to rise too quickly. I don't envy them.

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FED SURVEY
April 26, 2016
Donald Luskin, Trend Macrolytics: The uncertainties of the
coming election are a negative, because markets hate uncertainty.
SURVEY
That said, theFED
process
is showing unexpected innovation and
April
elasticity which
is a 30,
real positive long term. Political ideas are coming
in from outside the establishment, and that's healthy. Besides, how
long has it been since a politician has said "Let's make America great
again?" Oh, wait, I remember. It was when Deng Xiao Peng said, "To
get rich is glorious." See? Socialist countries CAN embrace
capitalism. Even here.
Rob Morgan, Sethi Financial Group: Last Wednesday, April 20th,
Donald Trump said he'd be inclined to replace Janet Yellen as Fed
Chair. He also said he'd support the notion of Congress auditing the
Fed's decision-making. Dangerous.
Chad Morganlander, Stifel Nicolaus (Washington Crossing
Advisors): We believe tight financial conditions, slow global growth
and the strong dollar will continue to influence Fed policy. We
expect a slower move to normalization than consensus.
Joel Naroff, Naroff Economic Advisors: The biggest issue facing
businesses is how long they can contain wage pressures and what
happens once the dam breaks. Too many don't have contingency
plans.
James Paulsen, Wells Capital Management: With economic
surprise indexes rising recently around the globe (particularly in
China) and with the US dollar weakening while commodity prices
recover, the Fed's decision to continue to pause rate hikes seems
increasingly indefensible.

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FED SURVEY
April 26, 2016
Lynn Reaser, Point Loma Nazarene University: A weaker dollar,
higher oil prices, and improved investor confidence have significantly
SURVEY
tempered the FED
headwinds
facing the U.S. April might be a window of
Aprilthe
30,
relative calm that
Fed could have raised rates if it had not
already preset expectations.
John Roberts, Hilliard Lyons: While we generally suggest that
investors ignore political considerations when making investments,
as we look at the long-term, the current tenor of the presidential
campaign and many of the policies being floated by the candidates
can in no way be considered positive for the equity markets.
Chris Rupkey, Bank of Tokyo-Mitsubishi: Economy shows signs
of its age as the expansion starts year 8 in July. No special
headwinds this late after the "Great Recession." The worry here is
too many sectors are having problems (maybe) and could drag us
down near recession, thinking oil & gas, strike one, autos, strike 2,
computers/iPhone, strike 3, banks/finance, strike 4, exporters, strike
5. Many sectors of the economy have already maxed out for this
expansion, had their best day. A lot of the areas of the economy
won't be getting any better.
John Ryding, RDQ Economics: The FOMC's excuses to continue to
delay on normalization are running thin. Risk assets have rebounded
and the decline never was much of a threat to the economy. Global
growth is sluggish but not a threat to the expansion. The Fed is
undermining confidence by suggesting the risks are such that it is
delaying renormalization.
Allen Sinai, Decision Economics: The Fed should be cautious until
the 2% price stability target clearly is in sight.

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FED SURVEY
April 26, 2016
Hank Smith, Haverford Investments: The only thing good about
the 2% expansion is there isn't enough growth to create excesses
FED SURVEY
that would normally
lead to the next recession. This could be a very
April
30,
long expansion.
Also,
low growth is helping to keep rates low which
is good for the budget.
Richard Steinberg, Steinberg Global Asset Management:
Gridlock in Washington would be good for the market but bad for the
country. Mostly likely outcome in the election is a split of power.
Diane Swonk, Diane Swonk & Associates: Markets seem to be
turning a blind eye to the real rise in political and policy risks
emerging both at home and abroad. They seem to be putting their
heads in the sand, ignoring the fact that they are more exposed,
with their rears in the air, than ever when they do that.
Mark Vitner, Wells Fargo: The employment and GDP data are
more consistent than widely thought. Seasonal factors boosted first
quarter job growth but did not impact GDP. The quality of jobs has
also been more heavily weighted toward lower value added
positions.

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FED SURVEY
April 26, 2016
Scott Wren, Wells Fargo Investment Institute: We are looking
for an improving economy and earnings as we move through the
balance of theFED
year SURVEY
and in 2017. In our opinion, the market is
April
30, and that is why the S&P 500 is near the allalready looking
at 2017,
time record high. Lousy first quarter earnings have been absolutely
expected by market participants for literally months. The poor
results are in no way, shape or form a surprise. This cyclical bull
market has more room to run in our opinion. Focus on the cyclical
sectors looking ahead like Technology, Consumer Discretionary and
Industrials. The pattern of cyclical domination in terms of
performance since the mid-February S&P 500 low should continue
over the balance of this year as the labor market continues to slowly
improve and confidence works its way higher over time. Pullbacks in
equities need to be bought.
Mark Zandi, Moody's Analytics: The U.S. economy is fast
approaching full-employment and targeted inflation. Any risks to the
economic outlook are fading. The Fed must soon resume normalizing
monetary policy or risk an over-heating economy.

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