cnbc fed survey, mar 15, 2016

8/19/2019 CNBC Fed Survey, Mar 15, 2016

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CNBC Fed Survey – March 15, 2016Page 2 of 30

FED SURVEYMarch 15, 2016

2. After this month’s meeting, the Federal Reserve's nextmove will most likely be:

When will the Federal Reserve make its next move?

88%

10%

0%

3%

90%

10%

0%

0%

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

Raise interest rates

Lower interest rates

Move to negative interest rates

Launch new quantitative easing

Jan 27 Mar 15

Jan 27 Survey March 15 Survey

For respondents

who said:Average month:

For respondents

who said: Average month:


(88%)May 2016


(90%)June 2016


(10%)August 2016


(10%)October 2016

Move to negative

interest rates (0%)--

Move to negative

interest rates (0%)--

Launch new

quantitative easing

3%

April 2016Launch new

quantitative easing

0%

--


3/30



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

2.8

2.1

1.9

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 15Survey Dates


4/30



4. New policy measures announced this week by theEuropean Central Bank will:

46% 46%

7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Help the ECB hit its

inflation target over thenext several years

Have no effect on

inflation

Don't know/unsure


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5. As a result of new ECB policy measures, the US FederalReserve will:

32%

5%

59%

5%

0%

10%

20%

30%

40%

50%

60%

70%

Enact fewer

rate hikes

Enact more rate

hikes

Not be effected

by ECB policy

Don't

know/unsure


6/30



6. Do you believe negative interest rates …

23%

31%

70%

37%

63%

54%

18%

54%

15%

15%

13%

10%

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

Can help stimulate economic growth?

Can help increase inflation?

Create more problems than they solveand should not be used?

Could be useful in Europe but should notbe used in the US?

Yes No Don't know/unsure


7/30



7. What do you believe are Janet Yellen and Stan Fischer'sfederal funds forecasts for ... ?

0.98%

1.90%

2.76%

3.16%

1.12%

2.15%

3.02%

3.36%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2016 2017 2018 The longer run

Janet Yellen Stan Fischer


8/30



8. The current presidential campaign is:

5%

56%

39%

0%

10%

20%

30%

40%

50%

60%

Positive for the

economic outlook

Negative for the

economic outlook

Having no effect on

the economic outlook


9/30


10/30


11/30



Comments:

Trump and Sanders would be worst for stock market. Associating any of these candidates with the word "best" is very

difficult to do. They strike me as equally awful.

Continued monetary easing by major non-U.S. central banks is a

key to U.S. prospects later this year and next. The monetary

easing by the ECB and later BOJ will help raise price inflation

going forward. The stock market needs higher price inflation for

its next major run up.

Clinton is same old, same old and opposed to fracking- not good.Sanders is let-the-good times roll … until the bills roll in and the

rich people who pay them leave. Trump will splurge on public

works projects like wall building and haranguing our competitors

over freer trade. He will be contentious but it might work.

Rubio/Cruz are anti-Fed and looking to shrink government. Not

the best agenda for short-term growth anyway. Kasich is more

centrist. Will not gut but will implement sounder fiscal policy. No

sense of where he stands on free trade, which should be the key

issue of this election.

You can probably put a piece of paper between the economic

policies of the mainstream Republican candidates (excluding

Trump), but I am favoring Kasich because of his willingness to

work across the aisle, which I believe the stock market will be

more comfortable with.

Election outcomes have a smaller and shorter-lived impact on the

markets than popular thinking suggests.

Rubio is just more of the same, no surprises/no solutions. Wall St.

likes the status quo. Cruz offers meaningful solutions to address

longer-term issues that need to be addressed. Cruz is willing to

make the tough decisions IMO.


12/30



Clinton's views on markets and economy are well known and well

vetted. At this point, Trump can and does say anything.

Prediction markets currently see a high probability of Hillary

Clinton heading to the White House. However, in this scenario, it

is also likely that the GOP retains the House of Representatives

with a risk of losing the Senate. Given the longer-run budget

challenges facing the US along with rising odds of US recession in

the next four years, the political climate in the next government

could bring serious questions to the popular Wall Street adage

that "gridlock is good." Clinton is only good for the stock market if Republicans maintain

control of the House and the Clinton/Ryan combo works as well as

Bill Clinton/Newt Gingrich combo did.

In the majority of presidential years the stock market has been

flat to down in the first half-year and rises in the second half.

Trump's most powerful pro-growth policy is his own exuberance

and pride in his own success. "Yes, I'm a billionaire. I did build

that. You can be a billionaire, too."


13/30



11. Where do you expect the S&P 500 stock index willbe on … ?

23112296

22472259

2293

2254

2159

2166

2140

2000

2035

2088

2223

2107

2158

2200

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

Jan 27'15

Mar17

April28

Jun 16 Jul 28 Sept16

Oct 27 Dec15

Jan 15'16

Jan 26 Mar15

Survey Dates

December 31, 2016 December 31, 2017


14/30



12. What do you expect the yield on the 10-yearTreasury 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%

3.09%

2.88%

2.83%

2.0%

2.5%

3.0%

3.5%

4.0%

Dec 16 Jan 27'15

Mar 17 April28

Jul 16 Jul 28 Sept16

Oct 27 Dec 15 Jan 26'16

Mar 15

Survey Dates

December 31, 2016 December 31, 2017


15/30



13. Where do you expect the fed funds target rate willbe 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%

1.61% 1.61%

1.62%

1.60%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Aug20

Sep16

Oct28

Dec16

Jan27,

'15

Mar17

April28

Jun16

Jul28

Aug25

Sept16

Oct27

Dec15

Jan15

'16

Jan26

Mar15

Dec 31, 2016 Dec 31, 2017


16/30



14. 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%

2.0%

2.5%

3.0%

3.5%

4.0%

Aug

20

Sep

16

Oct

28

Dec

16

Jan

27,'15

Mar

17

Apr

28

Jun

16

Jul

28

Aug

25

Sept

16

Oct

27

Dec

15

Jan

26'16

Mar

15

Survey Dates


17/30



15. 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


18/30



16. 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

'16Mar 15

2016 +2.88% +2.80% +2.84% +2.81% +2.78% +2.70% +2.64% +2.60% +2.45% +2.17% +2.14%

2017 +2.43% +2.31% +2.41%

+2.88%

+2.80%

+2.84%

+2.81%

+2.78%

+2.70%

+2.64%

+2.60%

+2.45%

+2.17% +2.14%

+2.43%

+2.31%

+2.41%

2.1%

2.2%

2.3%

2.4%

2.5%

2.6%

2.7%

2.8%

2.9%

3.0%

2016 2017


19/30



17. 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%

2.12%

2.07%

2.24%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

2.2%

2.4%

Dec 16Jan 27,

'15

Mar 17 April

28

Jun 16 Jul 28 Sept

16

Oct 27 Dec 15 Jan 26

'16

Mar 15

Survey Dates

2016 2017


20/30



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

Survey DateBalance Sheet

Average Forecast

April 28, 2014 survey October 2015

June 4 survey March 2016

July 29 survey December 2015

September 16 survey December 2015

October 28 survey January 2016

December 16 survey February 2016

Jan. 27, 2015 survey April 2016

March 17 survey April 2016

April 28 survey May 2016

June 16 survey July 2016

July 28 survey June 2016

August 25 survey September 2016

September 16 survey August 2016

October 27 survey November 2016

December 15 survey December 2016

Jan. 26, 2016 survey February 2017

March 15 survey February 2017


21/30



19. How would you characterize the Fed's monetary

policy?

28%

49%

46%

49%

44%

39%

50%

54%

50%

60%

54%

64%

49%

36%

49%

43%

43%

49%

43%

49%50%

47%

32%

44%

35%

47%

32%

23%

33%

46%

36%

17%

6%

3% 3% 3%

6% 5% 6%

4%

8%

8%

13%

10%13%

3%

3%

6% 5% 6%

3%

8%

6%

3%

10%

5%

10%

5% 5%0%

10%

20%

30%

40%

50%

60%

70%

Jul

31,'12

Jul

29,'14

Aug

20

Sep

16

Oct

28

Dec

16

Jan

27,'15

Mar

17

Apr

28

Jun

16

Jul 28 Sept

16

Oct

27

Dec

15

Jan

26 '16

Mar

15

Too accommodative Just right Too restrictive Don't know/unsure

Too accomodative

Don't know/unsure

Too restrictive

Just right


22/30



20. The Federal Reserve's December interest rate hikewas:

(For those answering “a mistake”) Why was it a mistake?

“Other” answers:

Because there was no sensible reason for it. Revealed the Fed as brain-dead.

Nominal growth is too weak

inflation call was wrong and that influenced their behavior

It was out of sync with the Fed's own reasoning about why it would hike rates and now that is clear.

15%

80%

5%

18%

82%

0%0%

20%

40%

60%

80%

100%

A mistake The right move Don't know/unsure

Jan 26 Mar 15

33%

50%

17%

29%

14%

57%

0%

20%

40%

60%

80%

100%

Negative effect on stocks Negative effect oneconomic growth

Other


23/30



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

“Other” responses:

China hard landing

Exaggerated fears that are alarming the public

HY bond spreads (tightening in fin. conditions)

Rising wage growth combined with lowproductivity

The Federal Reserve

Policy mistakes here or abroad

Inadequate monetary stimulus, leading to weak

nominal and real growth, fostering political

upheaval

Fear. Fear that what policy officials are doing

about the globe signifies that the global

economy is very bad and that if we do have a

recession since policy has not beennormalized it will be perceived as spent and

nobody can do anything at this point to help

alleviate a recession. If fear over this issue

becomes pronounced enough, private

economic and investment behaviors could turn

extremely cautious, creating a recession.

Survey

Date E u r o p e a n r e c e s s i o n /

f i n a n c i a l c r i s i s

T a x /

r e g u l a t o r y p o l i c i e s

S l o w

j o b g r o w t h

I n f l a t i o n

D e f l a t i o n

D e b t c e i l i n g

R i s e i n i n t e r e s t r a t e s

G e o p o l i t i c a l r i s k s

G l o b a l e c o n w e a k n e s s

S l o w

w a g e g r o w t h

T e r r o r i s t a t t a c k s i n t h e

U . S .

O u t c o m e o f U S

p r e s i d e n t i a l e l e c t i o n

O t h e r

D o n ' t k n o w /

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%

April 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%


24/30



22. 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)

Aug11,'11

Sep19

Oct31

Jan23,'12

Mar16

Apr24

Jul31

Sep12

Dec11

Jan29,'13

Mar19

Apr30

Jun18

Jul30

Sep6

Oct29

Dec17

Jan28'14

Mar18

Apr28

Jul29

Sep16

Oct28

Dec16

Jan27'15

Mar17

April28

Jun16

Jul28

Sept16

Oct27

Dec15

Jan15'16

Jan26

Ma15

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

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

10%

15%

20%

25%

30%

35%

40%

Survey Dates


25/30



23. What is your primary area of interest?

Comments:

John Augustine, The Huntington National Bank: NIRP has yet to

prove anything positive.

Jim Bianco, Bianco Research: I'm worried a contested convention,should it happen, will be very bad for democracy and the economy.I hope it doesn't happen.

Peter Boockvar, The Lindsey Group: We've reached the end ofthe road, not in what central banks can do, but of the influence overthe things they are trying to impact. The effectiveness of modern

day central bank activism is over.

Economics48%

Equities18%

Fixed Income13%

Currencies0%

Other23%


26/30



Robert Brusca, Fact and Opinion Economics: The Fed is tornover the right course of action. The FOMC soon will have dissenters,

then Fed policy will become more of a negative for the outlook.Yellen will be unable to hold this fragile alliance on the statement

together.

Thomas Costerg, Standard Chartered Bank: Elevated high-yieldbond spreads remain a crucial threat to US growth. We also think the

market may under-estimate the negative ramifications of the energysector's difficulties. Even if the Fed may sound hawkish in the nearterm, we think closer to the June meeting it will again prefer to play

it safe and keep rates on hold. We do not think the Fed will hikerates this year. In fact the next move may be a cut rather than ahike, in our view.

Tony Crescenzi, PIMCO: Central bankers are in the midst of an

important pivot, ostensibly agreeing at the recent G20 meeting inShanghai to a ceasefire in their global currency war by shifting theirfocus away from negative interest rates toward credit easing. Thiswill not only aid credit instruments, it is likely to enable the Fed to

implement additional interest rate hikes, albeit gradually, because itis contributing to a stabilization in global financial conditions.

Neil Dutta, Renaissance Macro Research: Since the last FOMCmeeting, US GDP tracking estimates have moved up, theunemployment rate has ticked down, core inflation has firmed, theUSD has sold off, and broader financial conditions have eased

modestly. Still, the Fed is acting as an automatic stabilizer at themoment, delaying given the fragility of financial markets. It will take

a few more months to determine whether the weakness in marketsreflects weakness in the real economy. We're doubtful this is the

case. Delays in March and April will be tactical in nature; the case forgradual rate hikes remains in place.


27/30



Robert Fry, Robert Fry Economics: When the Fed promised tokeep rates low for an extended period, they gave potential

borrowers/investors/homebuyers permission to sit on the fence andwait. When they suggested in December that they would raise the

fed funds rate 4 times in 2016, they freaked out the financialmarkets. The biggest problem with monetary policy isn't the level ofinterest rates; it's the forward guidance.

Kevin Giddis, Raymond James/Morgan Keegan: The Fed needsto lead the conversation on monetary policy and get its credibilityback, which is needed to restore the market's confidence in the

FOMC's ability to rely first on the data, and not their "hunch" thatinflation is around the corner. They need not make that mistakeagain.

Art Hogan, Wunderlich Securities: The Fed has done a good job

walking back the “4 in 2016” narrative and moving us from calendardependence to data dependence. The Fed should throw away theircalendar and always be data dependent.

John Kattar, Ardent Asset Advisors: The Fed bought themselvessome credibility with the last hike. Despite some good news on jobsand the recent rally in stocks, there is still plenty to worry about.

The Fed can afford to pause and wait for more data.

Jack Kleinhenz, Kleinhenz Associates: While the worldeconomies and the associated mood over the last 6 weeks have

created doubt about the strength of the US economy, recent datasuggests otherwise and the outlook should remain positive.

Consumer spending is off on a strong start this year. Housing shouldget the benefit of better labor market and growing incomes.

Nevertheless, voting members of the FOMC will remain in a holdingpattern until some of the world worries have been reduced.


28/30



David Kotok, Cumberland Advisors: Remarkable times when 1/4of world real output is housed in 23 countries with NIRP policy.

Market agents underestimate the power of NIRP on asset prices.Central bankers overestimate NIRP power on growth and inflation.

Subodh Kumar, Subodh Kumar & Associates: Chronic challengesexist in the Middle East and about North Korea. Other confluencesloom in the ides of March 2016 from both central banks and politics

worldwide. We see global harbingers of market volatility being thefailure of currencies from the euro to the yen to the renminbi tobehave as authorities indicated; the structure in fixed income,

especially of spreads; the highly jagged commodity pricing andranged momentum behavior in equities. After being quantitativeease centric, change looms and better balance is required betweenvalue and momentum across capital markets, an issue neitherinvestors nor authorities should ignore.

Guy LeBas, Janney Montgomery Scott: Job markets say hike.Inflation says don't hike. Stock markets say can't hike. Policymakersare confronted with a series of contradictory signals, all at a time

when monetary policy is becoming less helpful for the real economy.

Ward McCarthy, Jefferies: The primary feature of the US economy

is resilience because it is consumer-driven and 85% of householdsare employed in the service sector.

Rob Morgan, Sethi Financial Group: The Fed has made it clear it

will raise rates four times in 2016. I don't believe it will, but if itdoesn’t raise rates at the March meeting it makes the “4 hikes in

2016” target a bit harder to believe.

Joel Naroff, Naroff Economic Advisors: Once people stopfocusing on the equity markets they will realize the U.S. economy isin good shape and wages and prices are rising faster.


29/30



James Paulsen, Wells Capital Management: What the globaleconomy needs right now are leaders/policy officials who illustrate

confidence in the free private capitalistic system by stopping theprolific expansion of experimental economic treatments and thereby

implicitly suggest that Adam Smith, if left alone, will probablysucceed from here in bringing about a desired result. We need forour policy officials to communicate confidence rather than allow theircollective actions to exhibit fear.

Lynn Reaser, Point Loma Nazarene University: Negativeinterest rates represent a genie that should be put back in the bottle.

The transmission channels are not working and are in fact backfiring.For example, in Japan, the yen is higher, stock prices are lower, andpressure on bank profits is stifling borrowing.

John Roberts, Hilliard Lyons: Beyond global economic weakness

we worry political rhetoric and the outcome of the presidentialelection could negatively impact the market, as investors never likeuncertainty. Political polarization is certainly not positive for theequity markets.

Merrill Ross, Wunderlich: No central bank has yet successfullylifted off the zero bound. I believe this is because of the lack of

synchronicity in the economic direction among large and influentialcountries.

John Ryding, RDQ Economics: The Fed has botched its

communications policy. Rising core inflation and fallingunemployment should have a data dependent Fed raising rates next

week. It is unlikely to. Communications are a mess.

Allen Sinai, Decision Economics: Markets have overreacted fartoo much to recession risks. Just the opposite is in process.


30/30


Stephen Stanley, Pierpont Securities: The FOMC has beenexcessively sensitive to financial market swings and is falling

increasingly behind the curve.

Peter Tanous, Lynx Investment Advisory: A President Trumpwould tackle our infrastructure needs with gusto. He would embarkon a massive building and rebuilding program that would boost theeconomy. He will build beautiful roads, bridges, tunnels and even

walls. And at every ribbon cutting, there would be lines around theblock to get it.

Scott Wren, Wells Fargo Investment Institute: The ECB'sactions this morning are exactly what we thought wouldhappen....but over time. Rather than trickle these actions slowlyinto the market over a period of multiple meetings, they decided todo in one fell swoop what we and some in the market expected them

to do in aggregate. We have been telling our clients to not doubt theresolve of the world's major central banks to pull out all the stops intheir attempt to push inflation and economic growth higher. Moremajor global central bank action is almost surely to follow in the

nearer term. In the immediate wake of the ECB announcement itwas "risk on" around the globe. Now the market is debating whetherthis was a desperation move by the ECB. We do not view this as

desperation but basically as taking a bold step to do what they knewhad to eventually occur.

Clare Zempel, Zempel Strategic: Pay more attention to the

"market monetarist's" viewpoint.

cnbc fed survey, mar 15, 2016

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