FED SURVEY

May 2, 2017
These survey results represent the opinions of 43 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 27-29, 2017. 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 May meeting, the Federal Reserve will:

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Raise interest
rates 2%

Lower interest
rates 0%

Keep rates
unchanged 98%

Don't know/
unsure 0%

CNBC Fed Survey May 2, 2017

Page 1 of 37
 FED SURVEY
May 2, 2017

2. After its upcoming meeting, the Federal Reserve's next

directional move will most likely be:
FED SURVEY
Raise interest rates Lower interest rates
April 30,
Move to negative interest rates Launch new quantitative easing
100%
100% 100% 100% 100% 100%
98%
90% 94% 95% 95%
92%
90%
88% Raise interest rates
80%

70%

60%

50%

40%

30%

20%
Launch new quantitative easing
Lower interest rates
10% 10%
10%
4% 5% 5%
3% 2%
0% 0% 0% 0%
0%
Jan 27Mar 15Apr 26 Jun 14 Jul 26 Aug 24Sep 20 Nov 1 Dec 13Jan 31Mar 14 May 2

CNBC Fed Survey May 2, 2017

Page 2 of 37
 FED SURVEY
May 2, 2017

(For the 100% answering the next move will be to raise rates)

When will FED SURVEY

the Federal Reserve take this action?
April10%
0% 30, 20% 30% 40% 50% 60% 70% 80% 90% 100%

Jun 65%

Jul 9%

Aug 2%

Sep 21%

Oct 2%
Average:
Nov 0% July 2017

Mar 14
Dec 0% survey:
July 2017
Jan '18 0%
Jan 31
survey:
Feb 0%
May 2017
Mar 0%

Apr 0%

After Apr '18 0%

CNBC Fed Survey May 2, 2017

Page 3 of 37
 FED SURVEY
May 2, 2017

3. How many times in total will the Federal Reserve hike

rates in 2017?
FED SURVEY
5.00 April 30,

4.50

4.00

3.50
3.16
2.98
3.00
2.78
2.50
Average

2.50

1.97
2.00

1.50

1.00

0.50

0.00
Nov 1 Dec 13 Jan 31 Mar 14 May 2
Survey Dates

CNBC Fed Survey May 2, 2017

Page 4 of 37
 FED SURVEY
May 2, 2017

4. For its first 100 days, how do you grade the Trump
administration's ...?
FED SURVEY
(Grade conversion: F=0, D=1, C=2, B=3, A=4)
April 30,
0 1 2 3 4

Overall
performance
1.98 (C)

Economic
ideas
2.41 (C+)

Execution
of its
economic
1.63 (C-)
ideas

CNBC Fed Survey May 2, 2017

Page 5 of 37
 FED SURVEY
May 2, 2017

Comments:
FEDbut
Its early days, SURVEY
so far he's not exactly lived up to the rhetoric of his
supposedly great deal making skills.
April 30,
It's much too early to declare Trump a success or a failure.
Lots of talk but little action. Bluster doesn't replace realistic policymaking
and they are seeing that Congress doesn't bend to the president's whims
and fancies.
Much bluster, mixed delivery.
So far Trump has broken and kept all the right promises.
Starting to be afraid that the massive changes that are being proposed are
going to hurt the prospects for economic growth by postponing the public's
spending decisions. The changes they are proposing are simply too big.
For the macro economy, only small changes are recommended, otherwise
the economic actors on the stage could become frightened and simply shut
down all activity.
The president is certainly learning that government is not like business.
The media has been overly critical thus far. Deregulation remains the
most likely area of progress, and this is proceeding on schedule.
Legislative opportunities were always limited given uniform opposition
from Democrats and limited party-allegiances to most Republicans.
The release of the Trump tax plan shows a commitment to brevity which
has eluded lawmakers of late.
The speed is commendable.
They are chock full of pro-business and pro-consumer ideas.
We now can clearly see that political inexperience matters .
Need to get taxes cut and regulations slashed. This should be a no-
brainer.
Performance is always a bargained affair. It is never up to just the
president. His ideas are still good, controversial and a change is needed.
He is having impact even without getting what he wants. Execution has
been mixed but that's not surprising given what he is trying to do.

CNBC Fed Survey May 2, 2017

Page 6 of 37
 FED SURVEY
May 2, 2017

5. When do you expect, if at all, the following policies will

FEDbySURVEY
be enacted Congress and signed into law by President
April 30,
Trump?

Avg. forecast
Mar 14 survey May 2 survey

Q3 2017 Q4 2017
Health care reform
(4% said never) (12% said never)

Dodd-Frank reform Q1 2018 Q2 2018

(11% said never) (19% said never)

Q4 2017 X4 2017
Tax cuts (0% said never) (0% said never)

Infrastructure spending hike Q1 2018 Q1 2018

(13% said never) (14% said never)

GSE Q3 2018 Q3 2018

Fannie and Freddie reform (33% said never) (34% said never)

CNBC Fed Survey May 2, 2017

Page 7 of 37
 FED SURVEY
May 2, 2017

6. Please rate President Trump's economic policies on a

scale of +2 (very positive) to -2 (very negative) in the
FED
following SURVEY
areas?
April 30,
Very +2.00
positive
Business tax cuts Plans to reduce business regulation

+1.44 +1.46
+1.50 +1.38 +1.36

+1.40
+1.33
+1.21 +1.24
Somewhat +1.00
positive
+0.94
+0.87 +0.87

+0.50 +0.62
Individual tax cuts
Average

Neutral +0.00

Health care -0.24

-0.50

-0.81
-0.96 Trade policies -0.96
Somewhat
-1.00
negative
-1.23

-1.50

Very
negative -2.00
Dec 13 Jan 31 Mar 14 May 2
Survey dates

CNBC Fed Survey May 2, 2017

Page 8 of 37
 FED SURVEY
May 2, 2017

7. How have President Trump's foreign policy actions and

policies affected financial market risk? (Average calculated
FEDofSURVEY
using a scale -2 to +2 as indicated in the chart.)
April 30,
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Decreased
it a lot 0%
(-2)

Average:
Decreased it
somewhat 2% 0.69
(-1)

No
effect 38%
(0)

Increased
it somewhat 48%
(+1)

Increased
it a lot 12%
(+2)

CNBC Fed Survey May 2, 2017

Page 9 of 37
 FED SURVEY
May 2, 2017

8. How will President Donald Trump's economic policies

affect ?
FED SURVEY
Average calculated using a scale of:
April
-2=Decrease it 30,
a lot +1=Increase it somewhat
-1=Decrease it somewhat +2=Increase it a lot
0=Have no net effect
Survey dates
Jan 31 May 2
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0

+0.85
Overall growth
+0.81

+0.55
Employment
+0.60

+1.38
Deficits
+1.36

+1.05
Inflation
+0.79

+0.82
Stocks
+0.79

+1.25
Bond yields
+0.93

CNBC Fed Survey May 2, 2017

Page 10 of 37
 FED SURVEY
May 2, 2017

9. Thinking specifically about President Trump's recently

announced tax plan, how will it affect economic growth
and the FED SURVEY
deficit? (Average calculated using a scale of -2 to +2 as
April 30,
indicated in the chart.)

Economic growth The deficit

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Decrease 0%
it a lot
(-2) 0%
Averages:

Economic
Decrease it 2% growth:
somewhat +1.00
(-1) 2%
The deficit:
+1.38
No 12%
effect
(0) 7%

Increase 69%
it somewhat
(+1) 40%

Increase 17%
it a lot
(+2) 50%

CNBC Fed Survey May 2, 2017

Page 11 of 37
 FED SURVEY
May 2, 2017

10. Recent stock market gains appears to be mostly

driven by:
FED SURVEY
Dec 13 Jan 31 Mar 14 May 2
April 30,
0% 20% 40% 60% 80% 100%

18%
Solid economic
fundamentals, 26%
including a better
corporate 36%
profit outlook
50%

82%
Expectations
for policy changes 72%
from the new
62%
administration
48%

0%

Don't know/ 3%
unsure
2%

2%

CNBC Fed Survey May 2, 2017

Page 12 of 37
 FED SURVEY
May 2, 2017

11. The stock market's expectations for Trump

administration policy changes are:
FED SURVEY
Dec 13 Jan 31 Mar 14 May 2
April 30,
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

56%
Too 56%
optimistic 64%
62%

42%
39%
Realistic
32%
31%

2%
Too 3%
pessimistic 2%
2%

0%
Don't 3%
know/
unsure 2%
5%

CNBC Fed Survey May 2, 2017

Page 13 of 37
 FED SURVEY
May 2, 2017

12. Where do you expect the S&P 500 stock index will
be on ?
FED SURVEY
April 30,
December 31, 2017 December 31, 2018

2,700

2,600

2555
2564
2,500

2480 2453
2427
2,400
2409
2357
2354
2,300 2275
2244
2223
2249 2255
2,200 2234 2242
2200
2158
2,100
2107

2,000

1,900

1,800
Dec Jan Jan Mar Apr Jun Jul Aug Sep Nov Dec Jan Mar May
15 15 26 15 26 14 26 24 20 1 13 31 14 2
2016 2017
Survey Dates

CNBC Fed Survey May 2, 2017

Page 14 of 37
 FED SURVEY
May 2, 2017

13. What do you expect the yield on the 10-year

Treasury note will be on ?
FED SURVEY
April 30, December 31, 2017 December 31, 2018
4.0%

3.44% 3.43%
3.5%
3.37%

3.22%
3.09%
2.96%
3.0% 2.88%
2.90%
2.88%
2.83%
2.54% 2.74%
2.5% 2.58%
2.26% 2.28%

2.24% 2.25%

2.0%

1.5%

1.0%
Dec Jan Mar Apr Jun Jul Aug Sep Nov Dec Jan Mar May 2
15 26 15 26 14 26 24 20 1 13 31 14
2016 2017
Survey Dates

CNBC Fed Survey May 2, 2017

Page 15 of 37
 FED SURVEY
May 2, 2017

14. Where do you expect the fed funds target rate will
be on ?
FED SURVEY
Dec 31, 2017 Dec 31, 2018 Dec 31, 2019
April 30,
3.0%

2.73%
2.67% 2.70% 2.68%

2.5%

2.25%
2.17% 2.19%
2.22% 2.15%
2.07% 2.10%

2.0%
1.87%
1.81%

1.61% 1.61% 1.62% 1.60% 1.78%

1.69%
1.49%
1.5% 1.43% 1.42%

1.32%
1.43% 1.26%
1.22%

1.18% 1.16%
1.0% 1.09%

0.5%

0.0%
Dec Jan Jan Mar Apr Jun Jul Aug Sep Nov Dec Jan Mar May
15 15 26 15 26 14 26 24 20 1 13 31 14 2
2016 2017

CNBC Fed Survey May 2, 2017

Page 16 of 37
 FED SURVEY
May 2, 2017

15. At what fed funds level will the Federal Reserve stop
hiking rates in the current cycle? That is, what will be the
terminalFED
rate?SURVEY
April 30,
4.0%

3.5%

3.30%
3.20%
3.17%
3.11%
3.06%
3.16%
2.98% 2.95%
3.0% 3.04% 2.94%
2.92%
2.91%
2.85%2.79% 2.73%
2.65%
2.69%
2.65% 2.64%
2.58% 2.48%
2.5% 2.56%

2.42% 2.44%

2.29%

2.0%
Sep 16

Sept 16

Sep 20
Oct 28

Mar 17

Jun 16

Mar 15
Jul 28

Oct 27

Jun 14

Mar 14
Jul 26
Apr 28

Apr 26
Aug 20

Aug 25

Aug 24

Dec 13
Dec 16

Dec 15

Nov 1
Jan 27, '15

Jan 26 '16

Jan 31 '17

May 2

Survey Dates

CNBC Fed Survey May 2, 2017

Page 17 of 37
 FED SURVEY
May 2, 2017

16. When do you believe fed funds will reach its

terminal rate?
FED SURVEY
Survey date April 30,
2017 2018 2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Aug 20, 2014 Q4
Sept 16 Q3
Oct 28 Q4
Dec 16 Q1
Jan 27, 2015 Q1
Mar 17 Q4
Apr 28 Q1
June 16 Q1
July 28 Q2
Aug 25 Q3
Sept 16 Q1
Oct 27 Q3
Dec 15 Q1
Jan 26, 2016 Q2
Mar 15 Q3
Apr 26 Q4
Jun 14 Q4
Jul 26 Q4
Aug 24 Q4
Sept 20 Q4
Nov 1 Q1
Dec 13 Q2
Jan 31, 2017 Q2
Mar 14 Q2
May 2 Q2

CNBC Fed Survey May 2, 2017

Page 18 of 37
 FED SURVEY
May 2, 2017

17. What is your forecast for the year-over-year

percentage change in real U.S. GDP for ?
FED SURVEY 2017 2018
April 30,
3.0%

2.8% +2.76%
+2.75%

2.6% +2.57%
+2.62%
+2.58%

+2.43% +2.51%
+2.41%
2.4%
+2.38%

+2.28%
+2.26%
+2.31%

2.2% +2.25% +2.24%

+2.24%
+2.21%
+2.16%

2.0%

1.8%
Jan 26
Dec 15 Mar 15 Apr 26 Jun 14 Jul 26 Aug 24 Sep 20 Nov 1 Dec 13 Jan 31 Mar 14 May 2
'16
2017 +2.43% +2.31% +2.41% +2.21% +2.25% +2.26% +2.24% +2.28% +2.16% +2.57% +2.51% +2.38% +2.24%
2018 +2.76% +2.75% +2.62% +2.58%

CNBC Fed Survey May 2, 2017

Page 19 of 37
 FED SURVEY
May 2, 2017

18. Since Trump's election, by how many percentage

FEDyou
points have SURVEY
changed your GDP forecasts for... ?
April 30, Jan 31 Mar 14 May 2
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

+0.24

2017 +0.20

+0.12

+0.39

2018 +0.39

+0.35

CNBC Fed Survey May 2, 2017

Page 20 of 37
 FED SURVEY
May 2, 2017

19. What is your forecast for the year-over-year

percentage change in the headline U.S. CPI for ?
FED SURVEY 2017 2018
April 30,
2.8%

2.64%
2.6%

2.57%

2.50%
2.38%
2.4% 2.36% 2.44%

2.37%
2.24%
2.20%
2.2% 2.16% 2.23%
2.12%

2.12% 2.13%
2.09%
2.07%
2.0%
2.02%

1.8%

1.6%
Dec Jan Mar Apr Jun Jul Aug Sep Nov Dec Jan Mar May 2
15 26 15 26 14 26 24 20 1 13 31 14
2016 2017
Survey Dates

CNBC Fed Survey May 2, 2017

Page 21 of 37
 FED SURVEY
May 2, 2017

20. When do you expect the Fed to allow its balance

sheet to decline?
FED
0% SURVEY
5% 10% 15% 20% 25% 30% 35% 40%

MayApril
'17 30,
0%
Jun 8%
Jul 0%
Aug 0%
Sep 5%
Oct 5%
Nov 0%
Dec 18%
Jan '18 35%
Feb 3%
Mar 10%
Apr 3% Average:
May 0%
January
Jun 10%
2018
Jul 0%
Aug 0%
Sep 0%
Oct 0%
Nov 0%
Dec 3%
Jan '19 0%
Feb 0%
Mar 0%
Apr 0%
May '19 or later 3%
Never 0%

CNBC Fed Survey May 2, 2017

Page 22 of 37
 FED SURVEY
May 2, 2017

21. How much Fed balance sheet reduction, in billions of

dollars, do you believe is equivalent to a quarter-point
interestFED SURVEY
rate hike?
April
0% 30,
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

50 0%

75 3%

100 6%

125 3%

150 0% Average:
175 3%
$305
200 21% billion
225 0%

250 24%

275 0%

300 9%

325 0%

350 0%

375 3%

400 0%

425 0%

450 0%

475 0%

500 15%

More than 500 15%

CNBC Fed Survey May 2, 2017

Page 23 of 37
 FED SURVEY
May 2, 2017

22. Will the Fed stop hiking interest rates, at least

initially, when it begins to reduce the balance sheet?
FED SURVEY
April10%30, 20%
0% 30% 40% 50% 60% 70% 80% 90% 100%

Yes 43%

No 43%

Don't know/
unsure
15%

CNBC Fed Survey May 2, 2017

Page 24 of 37
 FED SURVEY
May 2, 2017

23. When/if the Fed reduces its balance sheet, SHOULD

it stop reinvesting its principal from matured securities
FED
all at once or SURVEY
taper the decline?
April 30,
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Stop all
at once
26%

Taper 72%

Don't know/
unsure
3%

CNBC Fed Survey May 2, 2017

Page 25 of 37
 FED SURVEY
May 2, 2017

When/if the Fed reduces its balance sheet, WILL it stop

reinvesting its principal from matured securities all at once
FED
or taper the SURVEY
decline?
April 30,
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Stop all
at once
15%

Taper 79%

Don't know/
unsure
5%

CNBC Fed Survey May 2, 2017

Page 26 of 37
 FED SURVEY
May 2, 2017

24. Should the balance sheet be reduced at all?

FED10%SURVEY
0% 20% 30% 40% 50% 60% 70% 80% 90% 100%
April 30,

Yes 74%

No 13%

Don't know/
unsure
13%

CNBC Fed Survey May 2, 2017

Page 27 of 37
 FED SURVEY
May 2, 2017

25. What is the single biggest threat facing the U.S.

economic recovery? (Percentage points)
FED SURVEY
April 30,

Protectionist trade policies

Terrorist attacks in the

Trump's temperament
Global econ weakness
Rise in interest rates
European recession/

presidential election
Immigration policy
regulatory policies

Slow wage growth

Geopolitical risks
Slow job growth

Outcome of US
financial crisis

Don't know/
Debt ceiling
Deflation
Inflation

Deficits

unsure
Other
Tax/

U.S.
Survey
Date
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
Mar 15 5 21 3 0 0 0 5 5 33 5 0 3 21 0
Apr 26 0 22 2 2 2 0 0 7 36 9 0 7 11 2
Jun 14 0 28 5 3 0 0 3 0 28 8 0 5 13 10 0

CNBC Fed Survey May 2, 2017

Page 28 of 37
 '17
Date
Survey

Nov 1
Jul 26

May 2
Jan 31

Mar 14
Dec 13
Sep 20
Aug 24
European recession/

Page 29 of 37
financial crisis

0
0
0
5
3
0
3
2
Tax/
regulatory policies

27
16
19
20

8
7
5
9
Slow job growth

3
2
3
2
8
11
3
7
Inflation

3
2
3
7
0
3
3
2
April 30,

Deflation

0
0
0
0
3
0
0
2 Debt ceiling

0
0
0
0
0
0
0
0
May 2, 2017

CNBC Fed Survey May 2, 2017

FED SURVEY
FED SURVEY

Deficits

0
0
0
Rise in interest rates

5
7
3
7
8
0
3
2

Geopolitical risks

24
4
10
7
3
3
3
10

Global econ weakness

5
7
15
19
32
30
31
22

Slow wage growth

0
0
0
0
3
8
3
7

Terrorist attacks in the

U.S.
0
2
0
2
0
5
3
0

Immigration policy
5
4
0

Outcome of US
presidential election
7
0
5
6
7

Protectionist trade policies

26
47
51
28
14

5
8
7

Trump's temperament
8
4
10

Other
13
13
0
5
8
11
11
7

Don't know/
unsure
0
0
0
2
0
0
0
2
 FED SURVEY
May 2, 2017

26. In the next 12 months, what percent probability do

you place on the U.S. entering recession? (0=No chance
FED SURVEY
of recession, 100=Certainty of recession)
40% April 30,

36.1%

35%
34.0%

30%
28.5% 28.8%

26.0%
25.9%
25.3%
25.5%
25% 24.4%
23.5%
22.9% 24.1%
23.2%
22.1%
22.2%
20.6% 21.6%
20.3% 20.4% 21.1%
20%
18.2% 18.4% 18.5%
19.1% 17.3% 18.6% 18.1%
16.9% 16.9%
17.6% 16.2% 16.4% 17.4% 16.4%

15.1%
16.2%
15% 15.1% 15.2%
15.3% 15.0%
15.2%
14.6% 14.7%
13.6%
13.0%

10%
Mar 16

Mar 19

Mar 18

Mar 17

Mar 15

Mar 14
Jan 28 '14

Jan 27 '15

Jan 15 '16

Jan 31 '17
Jan 23, '12

Jan 29, '13

April 28
Oct 31

Oct 29

Oct 28

Oct 27
Dec 11

Dec 17

Dec 16

Dec 15

Nov 1
Dec 13
Sept 16

Aug 24

May 2
Sep 6
Jul 31
Aug 11, '11

Jun 18
Jul 30

Jul 29

Jun 16
Jul 28

Jun 14
Jul 26
Sep 19

Sep 12

Sep 16

Sep 20
Apr 24

Apr 30

Apr 28

Jan 26

Apr 26

27. What is your primary area of interest?

CNBC Fed Survey May 2, 2017

Page 30 of 37
 FED SURVEY
May 2, 2017

FED SURVEY
April 30,
Other
23%

Currencies
0%
Fixed Income Economics
13% 53%

Equities
13%

Comments:

Marshall Acuff, Managing Director, Silvercrest Asset

Management: Improving profits are the mother's milk for a
sustainable bull market in stocks.

Peter Boockvar, Chief Market Analyst, The Lindsey Group:

Janet Yellen and Fed policy will be Donald Trump's biggest headwind
this year.

CNBC Fed Survey May 2, 2017

Page 31 of 37
 FED SURVEY
May 2, 2017

Robert Brusca, Chief Economist, Fact and Opinion Economics:

The economy is still weaker than it seems. Inflation expectations are
still very low, FED SURVEY
consumers are not motivated and are worried about
future income.April
Auto30,
demand is slackening for more fundamental
reasons. Income growth is slowing. Wages are not finding purchase.
There is FAITH that these things are changing but no evidence.
Trump's polices may take effect but they will also be short-term
disruptive. The Fed seems to have overestimated the extent to which
the economy has normalized. I think they are in the process of
overdoing it.

John Donaldson, Director of Fixed Income, Haverford Trust

Co.: There are still so many policy issues with no details from the
administration that the FOMC cannot even contemplate any action at
this meeting, much less model the expected outcomes. Every
equation would have an infinite number of variables.

Neil Dutta, Head of Economic Research, Renaissance Macro

Research: The latest headlines suggest that investors continue to
scale back their expectations of fiscal policy in 2017. This undercuts
the notion that markets have responded to fiscal policy. The risk rally
is about stronger earnings and growth. If DC manages to surprise
with tax reform, our sense is that stocks will rally further.

Mike Englund, Chief Economist, Action Economics, LLC: The

Fed's balance sheet expansion had little if any simulative effect on
the economy beyond initial purchases. Similarly, the unwind will
have little disruptive effect until the balance sheet approaches pre-
2009 levels.

Robert Fry, Chief Economist, Robert Fry Economics LLC: Weak

Q1 GDP was due primarily to a drop in personal consumption
expenditures on household utilities (warm winter) and slowdown in
rate of inventory accumulation. Both set us up for a much better
Q2.

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 FED SURVEY
May 2, 2017

Kevin Giddis, Head of Fixed Income Capital Markets, Raymond

James Financial: The optimism of the markets continues to baffle
me. We appear FED SURVEY
to be willing to look away from what we see in front
of us in favor April 30,
of what we hope will happen. To me, that "risk" could
backfire, and actually send rates lower, not higher.

Art Hogan, Chief Market Strategist, Wunderlich Securities: The

market has spent the first 100 days of the Trump administration
going from euphoria about pro-growth policy to disappointment over
how "complicated" DC is, to being realistic about the pace of policy
implementation. The fundamentals have been the key support,
underpinning the tape during the first 100-day emotional roller-
coaster.

Constance Hunter, Chief Economist, KPMG LLP: All dollars of

balance sheet reduction are not the same. Simply not reinvesting
proceeds is very different from the outright selling of assets held on
the Fed balance sheet. The economy is growing slowly but
steadily. So long as jobs growth keeps up the 1.5-2 million a year
pace, the labor market will get tighter and eventually (think 2019)
this is likely to tip us into the next recession.

Kurt Karl, Chief Economist, Swiss Re: Though we have a

Republican administration and a Republican Congress, it is going to
be very difficult to reform the health care act, cut taxes and bolster
infrastructure spending.

Jack Kleinhenz, Chief Economist, National Retail Federation: I

expect the slowdown in consumer spending in the first quarter to be
temporary and not the beginning of consumer weakness. The
outlook for 2017 still is positive given job gains, wage growth,
healthy balance sheets and, of course, consumer attitudes.

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 FED SURVEY
May 2, 2017

David Kotok, Chairman and Chief Investment Officer,

Cumberland Advisors: A full application of the Trump-Brady tax
FED earnings
plan adds $14-$18 SURVEY permanently to the S&P 500 index.
April
Those earnings then30,
grow at 5-6% annually. Very bullish for stock
prices.

Subodh Kumar, President, Subodh Kumar & Associates: The

shifting sands of politics swirl from trade to elections to referendums
to cold war-type tensions to rogue nation bravado. The U.S. has
been fast restructuring many policies raising the potential for
currency instability. Inflation may be low but has been rising. Global
growth is still less than pre-crisis levels of 4 % but up. Central
bank policy needs to evolve. Change is being implemented by the
Federal Reserve. Differences appear between central banks arguably
to a greater extent than have existed for close to a decade. In our
asset mix, we have above-benchmark cash and have made changes
within alternate assets as a hedge. On hedges, precious materials
seem more attractive compared to the elevated real estate pricing
that has developed amid minimal interest rates and, compared to
major currencies, seemingly less reflective of aspects like interest
differentials. The twists, turns and turbulence attributes in capital
markets are likely to be greater than currently reflected in volatility
indices and in many comments qualitatively. We favor quality in
investments for both fundamental reasons such as business or
country competition as well as for market structure reasons like the
potential for disruption or even breaks were the environment to be
different from that being in focus in momentum markets.

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 FED SURVEY
May 2, 2017

Guy LeBas, Chief Fixed Income Strategist, Janney

Montgomery Scott: Trumponomics isn't so much a framework we
FEDtraditional
can analyze using SURVEYeconomic and market tools as it is a
April
response to what 30,right in any given moment. Feel changes and
feels
the moment changes often. That sort of randomness to policy
creates risks--ones that may not come to pass for the financial
markets, but risks nonetheless. Regardless of the outcome of any
given risk factor, their greater prevalence demands a higher discount
rate on risk assets to compensate, yet it appears financial markets
have yet to price in that higher discount rate against what seems to
be solid current-period fundamentals.

Rob Morgan, Chief Investment Officer, Sandy Spring Bank: I

believe the Fed will hike in June, September, and, depending on the
economy, perhaps December. The Fed may also begin to drop hints
about when they will reduce their balance sheet.

Joel Naroff, President, Naroff Economic Advisors: Starting out

negotiations at the extreme end of a position may work in the
private sector, but it only rallies the opposition and makes it harder
to get things done in the public sector.

Lynn Reaser, Chief Economist, Point Loma Nazarene

University: While expectations of a quick policy boost are cooling,
economic growth and inflation are heating up. Bond traders have
jumped into the cooling pot. The Fed now must decide which pot it
will stir.

John Roberts, Director of Research, Hilliard Lyons: The strong

Q1 earnings results are the driving force behind the market. We
worry about what will happen once earnings season is complete.

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 FED SURVEY
May 2, 2017

John Ryding, Chief Economist, RDQ Economics: The execution

in tax reform is critical to the performance of the stock market and
FED
to the hopes for SURVEY
stronger growth in 2018 and beyond. The greatest
danger to the April
economy30, from Washington is uncertainty over trade
policy and the risk the U.S. will shift to a more protectionist stance.

Richard I Sichel, Senior Investment Strategist, The

Philadelphia Trust Company: The market loves Trump's ideas.
Investors need to be patient as these policies evolve through D.C.

Allen Sinai, Chief Global Economist and Strategist, Decision

Economics: Fiscal stimulus is a big deal for upping the pace of
expansion and making it longer.

Diane Swonk, CEO and Founder, DS Economics: Markets

continue to have a sort of blind faith that the administration can
boost profits and growth without any downside consequences for
inflation and budget deficits. This is at the same time they are
ignoring potential risks associated with increased uncertainty about
the policy path, and potentially damaging immigration and trade
policies. I fear a moment like when my daughter realized that I was
Santa Claus; it wasn't pretty.

Mark Vitner, Managing Director & Senior Economist, Wells

Fargo Securities: I am concerned the Fed may begin to reduce
their balance sheet too soon simply to get the process started under
Yellen's tenure. This is a potential recipe for disaster. Reducing the
balance sheet will likely have sharper and more immediate effects on
the economy than expanding it did and will be hard to accurately
assess, particularly if the Fed is still in the process of normalizing the
federal funds rate. Even with the unemployment rate as low as it is,
the economy is far more vulnerable than widely appreciated. There
are pockets of strength but still far too many parts of the economy
that are struggling.

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 FED SURVEY
May 2, 2017

Scott Wren, Senior Global Equity Strategist, Wells Fargo

Investment Institute: We continue to believe that the economic
effects of any FED SURVEY
proposals that "might" or "could" be implemented are
a 2018, 2019 April 30, story. The new administration will have
and 2020
little, if anything, to do with U.S. economic performance in 2017.
Look for the SPX to fade into the 2230-2330 range at year-end as
wage gains (avg. hourly earnings yr./yr. change) see a 3% print or
above in the next 5 months. The market will have margin concerns.
Fed rate hikes into an economy that is not accelerating meaningfully
are a headwind for valuation multiples. This is the first year in this
recovery that our projections result in a lower P/E multiple at year-
end for the SPX than was the case on Jan. 1st (our $127 estimate is
unchanged). SPX is just a touch above what we would consider "fair
value" for this point in time. The cycle is not over but it is likely we
will see a low-to-mid single digit return year for the SPX in 2017.

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