FED SURVEY

July 26, 2016

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 July 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 July meeting, the Federal Reserve will:

0%

10%

Raise interest rates

0%

Lower interest rates

0%

20%

0%

CNBC Fed Survey July 26, 2016

Page 1 of 30

40%

50%

60%

70%

80%

90%

100%

100%

Keep rates unchanged

Don't know/unsure

30%

FED SURVEY
July 26, 2016
(For those answering rates would be kept unchanged)
What is the main reason the Fed will keep rates unchanged
FED SURVEY
at its upcoming
meeting?
April 30,
June 14

0%

10%

July 26

20%

Global growth
concerns

30%

40%

50%

15%
41%

Markets
unprepared for
rate hike

5%
29%

Uncertainty
surrounding
Brexit

13%
17%
18%
14%

Other

Weak jobs
growth

0%

Don't
know/unsure

0%
0%

50%

Other:

Low inflation
No possible reason to raise them
Spread of negative rates suggests no
near-term increase
They know not what they do

CNBC Fed Survey July 26, 2016

Page 2 of 30

More better economic data

Weak and uncertain US ECONOMY
not just JOBS!!! PLUS below target
inflation...Remember the Fed's policy
directive

60%

FED SURVEY
July 26, 2016
2. After this months meeting, the Federal Reserve's next
FEDmove
SURVEY
directional
will most likely be:
April 30,
Jan 27

0%

Mar 15

20%

Move to negative interest rates

Launch new quantitative easing

10%
10%
4%
3%
0%
0%
0%
0%
0%
0%
3%
0%
2%
3%
0%

CNBC Fed Survey July 26, 2016

Page 3 of 30

40%

Jun 14

60%

Jul 26

80%

100%

88%
90%
94%
95%
100%

Raise interest rates

Lower interest rates

Apr 26

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

FED SURVEY
Jan 27
Survey
For
those
Avg.
who
month
said:

Raise
rates
(88%)

Lower
rates
(10%)

April
March30,
15
Survey
For
those
Avg.
who
month
said:

April 26
Survey
For
those
Avg.
who
month
said:

June 14
Survey
For
those
Avg.
who
month
said:

May
2016

Raise
rates
(90%)

June
2016

Raise
rates
(94%)

Raise
rates
(95%)

August
2016

Lower
rates
(10%)

Oct
2016

Lower
rates
(4%)

Move
to neg.
rates
(0%)

--

Move
to neg.
rates
(0%)

--

Move
to neg.
rates
(0%)

New
quant.
easing
(3%)

April
2016

New
quant.
easing
(0%)

--

New
quant.
easing
(2%)

CNBC Fed Survey July 26, 2016

Page 4 of 30

August
2016

Sept
2016

Lower
rates
(3%)

Sept
2016

Oct
2016

July 26
For
those
who
said:

Avg.
month

Raise
rates
(100%)

Dec
2016

Lower
rates
(0%)

--

--

--

--

Move to
neg.
rates
(0%)

--

Move to
neg.
rates
(0%)

Dec
2016

New
quant.
easing
(3%)

March
2017

New
quant.
easing
(0%)

FED SURVEY
July 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

3.00

2.8

2.50

2.1
1.9

2.00

1.6

1.5

1.50

0.9

1.00

0.50

0.00

Dec 15 '15 Jan 26 '16

Mar 15

Apr 26

Survey Dates

CNBC Fed Survey July 26, 2016

Page 5 of 30

Jun 14

Jul 26

FED SURVEY
July 26, 2016
4. The current presidential campaign is:
Positive for economic outlook

FED SURVEY
Negative for economic outlook
70%

April 30, Having no effect on economic outlook

61%
60%

58%

56%

60%

50%

40%

39%

40%
37%

38%

30%

20%

10%

5%
2%

3%

2%

Apr 26

Jun 14

Jul 26

0%

Mar 15

CNBC Fed Survey July 26, 2016

Page 6 of 30

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

FED SURVEY
A Democrat wins
April 30,

Doesn't matter

A Republican wins
Don't know/unsure

50%

45%

Republican Wins
40%

43%

40%
37%
35%

35%

30%

26%

30%

28%

26%

25%

23%
24%

20%

Democrat wins

21%

18%

Doesn't matter
15%

16%

15%
10%

10%

9%

Don't know/unsure

5%

0%

Mar 15

CNBC Fed Survey July 26, 2016

Page 7 of 30

Apr 26

Jun 14

Jul 26

FED SURVEY
July 26, 2016
6. Which candidate has best economic policies?
60%

FED SURVEY

Jun 14

Jul 26

April 30,

50%

45%

44%

40%

30%

30%

32%

25% 24%

20%

10%

0%

Clinton

CNBC Fed Survey July 26, 2016

Page 8 of 30

Trump

Don't know/unsure

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

FED SURVEYJun 14
60%

Jul 26

April 30,

50%

40%

38%

38%

38%

31%

31%

30%

25%

20%

10%

0%

Clinton

CNBC Fed Survey July 26, 2016

Page 9 of 30

Trump

Don't know/unsure

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

FED SURVEY
April 30,

90%

80%

Apr 26

Jun 14

Jul 26

80% 80%

70%

60%

52%
50%

40%

30%

26%
21%

20%

13%

15%

10%

7%

5%

0%

Clinton

CNBC Fed Survey July 26, 2016

Page 10 of 30

Trump

Don't know/unsure

FED SURVEY
July 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

2296

2,250

2247

2293

2259

2,200

2254

2200
2166

2,150

2234

2223
2158

2159

2183

2149
2114

2140

2,100

2249
2244

2107

2088

2,050

2035

2,000

2000
1,950

1,900

1,850

1,800
Dec
16

Jan
27
'15

Mar April Jun

17
28
16

CNBC Fed Survey July 26, 2016

Page 11 of 30

Jul Sept Oct

28
16
27

Dec
15

Survey Dates

Jan
15
'16

Jan
26

Mar Apr
15
26

Jun
14

Jul
26

FED SURVEY
July 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%
2.88%

3.04%

2.83%
2.89%

2.88%

2.67%

2.58%

2.67%

2.5%

2.51%

2.54%
2.24%

2.34%
2.11%

2.10%

2.0%

1.75%

1.5%

1.0%

Dec
16

Jan
27
'15

Mar April
17
28

Jul
16

Jul
28

Sept Oct
16
27
Survey Dates

CNBC Fed Survey July 26, 2016

Page 12 of 30

Dec
15

Jan
26
'16

Mar
15

Apr
26

Jun
14

Jul
26

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

FED SURVEY Dec 31, 2017

Dec 31, 2016

April 30,

2.5%

Dec 31, 2018

2.17%

2.13%
1.99%

2.0%

2.04%

2.07%

1.93%

1.84%

1.75%

1.61%1.62%

1.56%

1.5%

1.61%

1.78%
1.60%
1.49%

1.41%

1.46%

1.43%
1.17%
1.18%

1.0%

1.12%
0.88%
0.84%
0.91% 0.90%
0.85%

0.5%

0.0%

CNBC Fed Survey July 26, 2016

Page 13 of 30

0.78%

0.74%
0.59%

FED SURVEY
July 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%

3.17%
3.11%

3.16%
3.0%

3.06%
2.98%

3.04%

2.85% 2.79%

2.5%

2.69%
2.65%
2.58%

2.73%

2.65%
2.64%
2.56%
2.42%

2.0%

Survey Dates

CNBC Fed Survey July 26, 2016

Page 14 of 30

FED SURVEY
July 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

Jun 14 survey

Q4 2018

Jul 26 survey

Q4 2018

April 30,

CNBC Fed Survey July 26, 2016

Page 15 of 30

FED SURVEY
July 26, 2016
13.
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%

+2.26%
+2.25%

+2.21%

+2.14%

+2.08%
+2.05%

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

Jun 14

Jul 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% +2.05% +2.08%
2017

CNBC Fed Survey July 26, 2016

Page 16 of 30

+2.43% +2.31% +2.41% +2.21% +2.25% +2.26%

FED SURVEY
July 26, 2016
14.
What is your forecast for the year-over-year
percentage change in the headline U.S. CPI for ?

FED SURVEY

2016

April 30,

2017

2.4%

2.17%
2.24%
2.2%

2.08%

2.12%

2.07%

2.0%

2.20%

2.17%

2.17%

2.13%

2.07%
2.02%

1.89% 1.88%

1.96%
1.8%

1.75%

1.72%
1.75%

1.66%

1.6%

1.57%
1.50%
1.4%

1.2%

1.0%
Dec
16

Jan
27,
'15

Mar April Jun

17
28
16

Jul
28

Sept Oct
16
27
Survey Dates

CNBC Fed Survey July 26, 2016

Page 17 of 30

Dec
15

Jan
26
'16

Mar
15

Apr
26

Jun
14

Jul
26

FED SURVEY
July 26, 2016
15.
When do you expect the Fed to allow its balance
sheet to decline?

FED
0% SURVEY
10%
20%
April 30,

Jun '16

0%

Jul '16

0%
0%

Aug '16

0%
0%

Sep '16

3%
0%

Oct '16

0%
0%

Nov '16

0%
0%

Dec '16

5%
5%

Jan '17

5%

Feb '17
Mar '17
Apr '17
May '17

50%

60%

70%

80%

0%
0%
2%
3%

8%

7%

5%
2%
63%
5%
7%

CNBC Fed Survey July 26, 2016

Page 18 of 30

40%

10%

After May '17

Never

30%

71%

FED SURVEY
July 26, 2016

20%
15%
8%
4%
8%
5%
7%
10%
3%
12%
6%
31%
40%
0%
6%
3%
3%
6%
0%
0%
0%
0%
5%
0%
0%
2%

31%
28%
30%
27%
29%
32%
21%
23%
26%
29%
26%
18%
14%
13%
14%
11%
17%
21%
16%
8%
10%
10%
21%
22%
28%
20%

20%
20%
22%
22%
24%
29%
30%
26%
21%
12%
29%
15%
14%
9%
0%
8%
3%
9%
2%
5%
5%
5%
3%
2%
5%
7%

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

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

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

10%
18%
8%
15%
12%
5%
8%
12%
6%
10%
3%
6%
6%
6%
14%
12%
0%
8%
8%
0%
5%
0%
3%
2%

18%
12%
11%
8%
14%
16%
8%
11%
25%
6%
8%
13%
10%
5%
5%
7%
0%
10%

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

6%
17%
8%
6%
9%
8%
10%
5%
8%
5%
9%
8%
7%

3%
0%
0%
0%
0%
0%

3%
7%
5%
7%

13%
7%

Other responses:

Ineffective Fed policies

US home-grown recession

CNBC Fed Survey July 26, 2016

Page 19 of 30

Weak business investment cycle

11%
13%
14%
7%
13%
2%
21%
18%
13%
12%
11%
8%
3%
16%
14%
19%
11%
9%
14%
5%
15%
23%
21%
11%
10%
7%

Don't know/
unsure

Other

Protectionist trade
policies

Outcome of US
presidential election

Terrorist attacks in the

U.S.

Slow wage growth

Global econ weakness

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
Jun 14
Jul 26

European recession/
financial crisis

April 30,

Geopolitical risks

FED SURVEY

Rise in interest rates

16.
What is the single biggest threat facing the U.S.
economic recovery?

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

FED SURVEY
July 26, 2016
17.
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%
23.5%

25.5%
22.9%
22.1%

20%

20.6%
20.3%

20.4%
18.2%

19.1%
17.6%

18.4%

22.2%
21.1%

18.6%

17.3%
16.9%
16.2%

16.4%

15.1%
16.9%
16.2%
15.3%
15.2%
15.0%
14.6%

15%

24.1%

17.4%

15.1%
14.7%

13.6%
13.0%

Aug 11, '11

Sep 19
Oct 31
Jan 23, '12
Mar 16
Apr 24
Jul 31
Sep 12
Dec 11
Jan 29, '13
Mar 19
Apr 30
Jun 18
Jul 30
Sep 6
Oct 29
Dec 17
Jan 28 '14
Mar 18
Apr 28
Jul 29
Sep 16
Oct 28
Dec 16
Jan 27 '15
Mar 17
April 28
Jun 16
Jul 28
Sept 16
Oct 27
Dec 15
Jan 15 '16
Jan 26
Mar 15
Apr 26
Jun 14
Jul 26

10%

Survey Dates

CNBC Fed Survey July 26, 2016

Page 20 of 30

FED SURVEY
July 26, 2016
18.

How serious a concern is Brexit for the

(1=Not serious at all

FED SURVEY

10

10=Highest level of seriousness)

April 30,
9

6.9

5.3
5

2.8

US economy

CNBC Fed Survey July 26, 2016

Page 21 of 30

EU economy

British economy

FED SURVEY
July 26, 2016
19.
In the next 12 months, what percent probability do
you place on the UK and EU entering recession?
100%

FED SURVEY
April 30,

90%

80%

70%

60%

55.1%

50%

38.3%

40%

30%

20%

10%

0%

UK

CNBC Fed Survey July 26, 2016

Page 22 of 30

EU

FED SURVEY
July 26, 2016
20.
How will Brexit affect the chance that other
countries will leave the EU?

FED SURVEY

100%

April 30,

90%

80%

73%
70%

60%

50%

40%

30%

20%

15%

10%

7%

5%

0%

Increase the
chance

Decrease the
chance

CNBC Fed Survey July 26, 2016

Page 23 of 30

Have no effect

Don't
know/unsure

FED SURVEY
July 26, 2016
21.

What is your primary area of interest?

FED SURVEY
April 30,
Other
21%
Currencies
2%

Economics
45%
Fixed Income
17%

Equities
14%

Comments:
Marshall Acuff, Silvercrest Asset Management: Expect
increasing discussion about fiscal stimulus in 2017. The defense
budget is already turning around. Infrastructure spending will
increase.
John Augustine, The Huntington National Bank: The US
economy is currently in a sweet spot - stocks up, yields down, $2
gasoline, unemployment below 5%. Not sure how long it will last.
Americans should take advantage of it while they can!
Jim Bianco, Bianco Research: The prospects of immediate central
banks stimulus in response to BRexit while the potential effects on
economic growth are uncertain is serving to driving risk (stock)
markets higher. If central banks provide "sugar" when the economy
has not changed, the "high" will be seen in markets.

CNBC Fed Survey July 26, 2016

Page 24 of 30

FED SURVEY
July 26, 2016
Peter Boockvar, The Lindsey Group: This is the most bizarre,
surreal, and confusing economic and investing landscape that any of
FED SURVEY
us will ever see.
April 30,
Robert Brusca, Fact and Opinion Economics: Global risk is ON
whether markets want it or not. Europe is sputtering as it IS at risk
to Brexit as is the UK. The US economy is not gathering momentum
as the Fed has expected this year. Job growth is slowing as is overall
activity. The many years of leaning too hard on the service sector
are taking their toll. Trump is probably not electable but he has the
best grasp on US trade issues. Trade - NOT FREE TRADE - is killing
the US economy and not even academics will mention it. So we will
kick the can of status quo down the road and the economy will
gradually suffocate itself.
Tony Crescenzi, PIMCO: Whereas central bankers have been
hellbent on printing money in order to slow bank deleveraging and
thereby avoid the extinguishment of money (if repaid loans are not
replaced with new ones, money disappears from the financial system
in the same way it was created out of thin air), today central
bankers could well be speeding up bank deleveraging, by conveying
a sense of pessimism and by taking actions that could reduce net
interest margins.
As for the Fed outlook, the obsession over the short-term Fed
outlook will almost certainly continue. Investors nonetheless are best
served by focusing on the global outlook for policy rates, with rates
likely to stay low for the rest of the decade, say around zero for
Europe and Japan, and around 2 for the U.S. Look for the Fed to
acknowledge the recent strength in consumer spending in its
upcoming FOMC statement on July 27th. Fed officials in the
aftermath of the meeting are also likely to point to consumer
spending data as a means of maintaining optionality for future rate
hikes, even if they never use it, keeping the rate-hike narrative
alive. Focus next on the annual gathering of central bankers at the
CNBC Fed Survey July 26, 2016
Page 25 of 30

FED SURVEY
July 26, 2016
Jackson Hole Symposium, which could well be the next major
communication from the Fed. Whereas last year the Symposium's
FED SURVEY
topic was on inflation
and in 2014 it was employment, this year the
April Resilient
30,
topic is "Designing
Monetary Policy for the Future." This
focus away from the Fed's dual mandate and on the Fed itself
reinforces the recent focus on the efficacy of central banks as well as
the challenges they face in removing their monetary accommodation,
keeping investors expecting very little on this front.
Low policy rates are supportive of credit and equity assets, but the
glue that holds together this investment thesis is continued economic
growth, which does in fact look likely to continue, even if weak by
historical standards.
John Donaldson, Haverford Trust Co.: The FOMC has painted
itself into a corner as "Data Dependent" increasingly looks like
"Headline Sensitive." They appear reactive to the most recent noise
rather than underlying trends in the economy.
Neil Dutta, Renaissance Macro Research: The doves on the
FOMC will have a difficult time delaying a second rate hike beyond
2016 and the hawks will have a strong case to make as early as
September. Absent a shock, the rebound in GDP growth with
tracking estimates running 2.5 to 3.0 percent, solid trend in
employment, and progress on inflation suggest that the Fed's
objectives are being achieved with increasing speed.
Robert Fry, Robert Fry Economics: Because low interest rates
force people to save more to fund their future retirements, they are
actually restraining economic growth. In macro theory terms, the IS
curve is upward-sloping at very low interest rates.

CNBC Fed Survey July 26, 2016

Page 26 of 30

FED SURVEY
July 26, 2016
Dennis Gartman, The Gartman Letter: My greatest fear is that
should Mr. Trump by some quirk of fate win the Presidency that he
FED
will push ahead
withSURVEY
trade embargoes, sanctions, tariffs and the like
April
30, and enemies alike. I shall vote Republican
against our trade
allies
but with my nose held tight and my eyes cast downward as I cast
my vote.
Kevin Giddis, Raymond James Financial: The Fed seems to be ok
with the market being the tail that wags the dog. This is evident
when global growth, energy prices and terrorism affect Fed policy vs.
employment and economic growth. Do we really plan to wait for the
right moment to present itself to the committee? If the Fed wants to
regain control and complete the mandate that Congress has
empowered them to do, they should raise rates at the next meeting.
There will not likely ever be a perfect time.
Art Hogan, Wunderlich Securities: With the negative drumbeat of
the RNC behind us, and with better EPS and economic data, this
market can continue its path of least resistance higher. The S&P 500
yields are 50 BPs higher than the 10-Year. That's bullish for stocks.
John Kattar, Ardent Asset Advisors: The Fed is on hold until after
the election. For me, the general environment is very unpredictable,
and I get the sense that 2017 will be a pivotal year that will see
watershed-type events with potential for extreme good or bad.
David Kotok, Cumberland Advisors: Politics: US, Japan, Brexit,
Italy, everywhere. Risk rising due to politics: markets do not know
how to discount politics. Thus volatility rises in response. The Brexit
vote is a good example.

CNBC Fed Survey July 26, 2016

Page 27 of 30

FED SURVEY
July 26, 2016
Subodh Kumar, Subodh Kumar & Associates: Notwithstanding
quantitative ease and minuscule administered rates including in the
SURVEY
United States,FED
Europe
and Japan, we see ephemeral stability in an
April
30,
unstable world.
Since
2008 at least, markets appear overly reactive
rather than proactively balanced. Political, economic and credit rating
developments and in currencies run contrary to complacency about
central banks independently maintaining dominance. Politicization
appears a risk, from the US elections but also internally in Europe as
well as Asia not least in China and Japan. Terrorism and
conflagration risk appears to be expanding. Competition is likely to
remain fierce even in recovery and contributory to turbulence risk.
Asset diversification needs to have above benchmark cash, alternate
assets including precious metals, as well as traditional capital market
investments like equities and fixed income. Fiduciary issues are likely
to loom. Unlike the first half of 2016, in the US in particular, where
markets moved up with weakness in financials, we expect them to
be critical going forward worldwide. Into 2017 globally, we expect
high market turbulence.
Guy LeBas, Janney Montgomery Scott: The discussion over
Brexit has masked the fact that long-term inflation breakevens have
been trending lower since April. If inflation doesn't rise, neither will
rates. These deteriorating expectations are a hint that markets have
little long-term faith in any policy increases, and it's hard to imagine
overnight rates will reach more than 1% in this cycle, unless inflation
expectations change drastically.
Rob Morgan, Sethi Financial Group: Brexit will keep the Fed from
acting next week, and given the Fed's proclivity to keep rates
unchanged before a US presidential election, we won't see a rate
hike until December at the earliest.
Joel Naroff, Naroff Economic Advisors: With Brexit fading, the
Fed will have to come up with some other excuse not to raise rates
and that excuse may be hard to find.
CNBC Fed Survey July 26, 2016
Page 28 of 30

FED SURVEY
July 26, 2016
James Paulsen, Wells Capital Management: With nearly all
policy officials simultaneously pushing upward on the global economy
FED
SURVEY
for the first time
in this
recovery, it is probably likely that most are
April
30, year both by faster global growth and by
surprised in the
coming
synchronized broader global growth. How shocking would it be if
sometime in the next year the ECB announced it will soon begin
tapering?
Lynn Reaser, Point Loma Nazarene University: If market
expectations were not so entrenched, solid economic data and postBrexit calm might have endorsed a July rate hike.
John Roberts, Hilliard Lyons: We remain marginally positive on
US equities, but believe most of the year's gains are already in place.
Positive investment performance will be driven by cycling out of
overvalued market sectors and into more attractively priced sectors.
John Ryding, RDQ Economics: Core CPI inflation is 2.3%, the
economy is at full employment, and the stock market is at a record
high. A prudent Fed would be snugging interest rates. However, we
see this Fed as being too preoccupied with risks to hike rates before
December.
Allen Sinai, Decision Economics: The U.S. is now in a different
phase of the business cycle -- fundamentals indicate rising interest
rates and a stronger dollar, with the stock market still able to reach
repeated new highs.
Hank Smith, Haverford Investments: Either presidential
candidate has plenty of fiscal levers to pull to help the economy: tax
reform, increased spending, and regulatory relief.

CNBC Fed Survey July 26, 2016

Page 29 of 30

FED SURVEY
July 26, 2016
Diane Swonk, Diane Swonk & Associates: Financial markets are
not pricing for the geopolitical and political risks to growth we face,
FEDare
SURVEY
and central banks
inadvertently reinforcing blind optimism by
April
30,risks. Something has to give...
hedging against
those
Peter Tanous, Lynx Investment Advisory: Were still waiting for
inflation. Remember inflation?
Scott Wren, Wells Fargo Investment Institute: US economic
data (i.e., ISM manufacturing and services surveys, retail sales, etc.)
have increased confidence that the domestic economy is not going to
roll over into recession any time soon. US equities are taking on a
new round of "safe haven" status. The movement toward improved
market/economic confidence and safe haven status are in the early
stages of their development. We have confidence in our 2190-2290
year-end target for the S&P 500 with cyclical sectors leading as they
have since the February 11th lows.
Mark Zandi, Moody's Analytics: The U.S. economy is performing
well and its prospects are good. Despite a serious of global shocks,
the U.S. economy will soon achieve full employment.

CNBC Fed Survey July 26, 2016

Page 30 of 30