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These survey results represent the opinions of 33 of the nation’s top money managers, investment strategists, and professional economists.They responded to CNBC’s invitation to participate in our online survey. Their responses were collected on January 22-23, 2015. Participants were not required to answer every question.Results are also shown for identical questions in earlier surveys.This is not intended to be a scientific poll and its results should not be extrapolated beyond those who did accept our invitation.
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CNBC Fed Survey – January 27, 2015 Page 1 of 30
FED SURVEY January 27, 2015
These survey results represent the opinions of 33 of the nation’s top money managers, investment strategists, and professional economists. They responded to CNBC’s invitation to participate in our online survey. Their responses were collected
on January 22-23, 2015. Participants were not required to answer every question. Results are also shown for identical questions in earlier surveys.
This is not intended to be a scientific poll and its results should not be extrapolated beyond those who did accept our invitation.
1. What is the probability the Fed will begin a new QE program in the next year/two years? (0%=No chance of new QE, 100%=Certainty
of new QE)
Note: In some previous surveys, this question was: “What is the probability the Fed will begin a new QE
program in the 12/24 months after it concludes the current QE program?”
10%
14%
9%
10%
14%
18%
14%
17%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Sep 16 Oct 28 Dec 16 Jan 27Chance of new QE
Next year Next two years
CNBC Fed Survey – January 27, 2015 Page 2 of 30
FED SURVEY January 27, 2015
2. The Fed will remove the phrase “patient” from its monetary
policy statement in ...
0%
0%
33%
27%
21%
0%
0%
3%
3%
0% 5% 10% 15% 20% 25% 30% 35%
January
February
March
April
June
July
August
September
October or later
CNBC Fed Survey – January 27, 2015 Page 3 of 30
FED SURVEY January 27, 2015
3. Relative to an economy operating at full capacity, what best describes your view of the amount of resource slack in the U.S. right now for labor?
48%
34%
20% 18%
16% 16%
36%
40%
60%
69%
55%
50%
4% 6%
3%
0% 0%
6%
8%
11%
6%
5%
24%
19%
4%
9% 9% 8%
5%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
July 29 August 20 Sep 16 Oct 28 Dec 16 Jan 27
Considerably more slack now Modestly more slack now
No difference Modestly less slack now
Considerably less slack now
Modestly less slack
Modestly more slack
Considerably less slack
No difference
Considerably more slack
CNBC Fed Survey – January 27, 2015 Page 4 of 30
FED SURVEY January 27, 2015
Relative to an economy operating at full capacity, what best describes your view of the amount of resource slack in the U.S. right now for production capacity?
8%
0%
56%
60%
64% 64%
55% 59%
13%
19%
24%
13%
9%
0%
10%
20%
30%
40%
50%
60%
70%
July 29 August 20 Sep 16 Oct 28 Dec 16 Jan 27
Considerably more slack now Modestly more slack now
No difference Modestly less slack now
Considerably less slack now
No difference
Modestly more slack
Modestly less slack
Considerably less slack
Considerably more slack
CNBC Fed Survey – January 27, 2015 Page 5 of 30
FED SURVEY January 27, 2015
4. Where do you expect the S&P 500 stock index will be on … ?
2017 2029
2053
2109
2066
2093
2122 2075
2149
2111
2194
2187
2250 2248
2311 2296
1,800
1,900
2,000
2,100
2,200
2,300
2,400
Apr 28 Jun 4 July 29 Sep 16 Oct 28 Dec 16 Jan 27
Survey Dates
June 30, 2015 December 31, 2015
June 30, 2016 December 31, 2016
CNBC Fed Survey – January 27, 2015 Page 6 of 30
FED SURVEY January 27, 2015
5. What do you expect the yield on the 10-year Treasury note will be on … ?
3.54%
3.24%
3.15% 3.16%
2.90%
2.63%
2.14%
3.43% 3.45%
3.19%
2.96%
2.54%
3.30%
2.80%
3.52%
3.04%
2.0%
2.5%
3.0%
3.5%
4.0%
Apr 28 Jun 4 Jul 29 Sep 16 Oct 28 Dec 16 Jan 27
Survey Dates
June 30, 2015 December 31, 2015
June 30, 2016 December 31, 2016
CNBC Fed Survey – January 27, 2015 Page 7 of 30
FED SURVEY January 27, 2015
6. Which of the following reasons primarily account for low interest rates on U.S. government debt? (Select one or two reasons)
72%
19%
13%
19%
28%
3%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Other responses: - High demand relative to supply - Higher U.S. growth and interest rate 0utlook relative to other countries - Low competitive yields on other Sovereigns
CNBC Fed Survey – January 27, 2015 Page 8 of 30
FED SURVEY January 27, 2015
7. What is your forecast for the year-over-year percentage change in real U.S. GDP for …?
Jan 28,'14
Mar 18 Apr 28 Jun 4 Jul 29 Sep 16 Oct 28 Dec 16Jan 27,
'15
2015 +2.90% +3.02% +3.00% +2.81% +2.75% +2.90% +2.90% +3.02% +2.99%
2016 +2.88% +2.80%
+2.90%
+3.02%
+3.00%
+2.81%
+2.75%
+2.90% +2.90%
+3.02%
+2.99%
+2.88%
+2.80%
2.7%
2.8%
2.8%
2.9%
2.9%
3.0%
3.0%
3.1%
2015 2016
CNBC Fed Survey – January 27, 2015 Page 9 of 30
FED SURVEY January 27, 2015
8. What is your forecast for the year-over-year percentage change in the headline U.S. CPI for …?
2.02%
2.29% 2.27%
2.01%
1.74%
1.17%
2.17%
2.07%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2.2%
2.4%
Jun 4 Jul 29 Sep 16 Oct 28 Dec 16 Jan 27, '15
Survey Dates
2015 2016
CNBC Fed Survey – January 27, 2015 Page 10 of 30
FED SURVEY January 27, 2015
9. When do you expect the Fed to allow its balance sheet to decline?
Note: In the April survey, the question was phrased as: “When do you believe the Fed will begin
reducing the size of its balance sheet?”
0%
5%
10%
15%
20%
25%
30%
35%
Oct
Nov
Dec
Jan
'1
5
Feb
Mar
Apr
May
Ju
n
Ju
l
Aug
Sep
Oct
Nov
Dec
Jan
'1
6
Feb
Mar
Apr
May
Ju
n
Ju
l
Aug
Sep
Oct
Nov
Dec
Jan
'1
7
Aft
er J
an…
Apr 28 Jun 4 Jul 29 Sep 16 Oct 28 Dec 16 Jan 27 '15
Averages: April 28 survey: Oct '15
June 4 survey: Mar '16
June 29 survey: Dec '15
Sept. 16 survey: Dec '15
Oct. 28 survey: Jan '16
Dec. 16 survey: Feb '16
Jan. 27 survey: Apr '16
CNBC Fed Survey – January 27, 2015 Page 11 of 30
FED SURVEY January 27, 2015
10. When do you think the FOMC will first increase the fed funds rate?
0%
10%
20%
30%
40%
50%
60%
Au
g
Sep
Oct
Nov
Dec
Jan '1
5
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
Nov
Dec
Jan '1
6
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
Nov
Dec
Jan '1
7
Aft
er
Jan
'1
7
Feb
Mar
Aft
er
Mar '17
April 28 Jun 4 Jun 29 Aug 20
Sep 16 Oct 28 Dec 16 Jan 27 '15
Averages: April 28 survey:
July 2015
June 4 survey:
August 2015
July 29 survey:
August 2015
Aug 20 survey:
July 2015
Sep 16 survey:
June 2015
Oct 28 survey:
July 2015
Dec 16 survey:
July 2015
Jan 27 '15 survey:
Sep 2015
CNBC Fed Survey – January 27, 2015 Page 12 of 30
FED SURVEY January 27, 2015
11. How would you characterize the Fed's current monetary policy?
28%
49%
46%
49%
44%
39%
50%
43% 43%
49%
43%
49% 50%
47%
17%
6%
3% 3% 3%
6%
0%
13%
3% 3%
6% 5% 6%
3%
0%
10%
20%
30%
40%
50%
60%
Jul 31, '12 Jul 29, '14 Aug 20 Sep 16 Oct 28 Dec 16 Jan 27, '15
Too accommodative Just right Too restrictive Don't know/unsure
Too accomodative
Don't know/unsure
Too restrictive
Just right
CNBC Fed Survey – January 27, 2015 Page 13 of 30
FED SURVEY January 27, 2015
12. Where do you expect the fed funds target rate will be on … ?
Jul
30
Sep
17
Oct
29
Dec
17
Jan
28
'14
Mar
18
Apr
28
Jun
4
Jul
29
Aug
20
Sep
16
Oct
28
Dec
16
Jan
27,
'15
Jun 30, 2015 0.50%0.39%0.40%0.33%0.31%0.25%
Dec 31, 2015 0.97%0.92%0.82%0.70%0.72%0.83%0.99%0.68%1.05%0.89%0.98%0.89%0.83%0.73%
Jun 30, 2016 1.53%1.56%1.48%1.38%1.26%
Dec 31, 2016 1.99%2.13%2.04%1.93%1.75%
0.50%
0.39% 0.40%
0.33% 0.31%
0.25%
0.97% 0.92%
0.82%
0.70% 0.72%
0.83%
0.99%
0.68%
1.05%
0.89%
0.98%
0.89%
0.83%
0.73%
1.53% 1.56%
1.48%
1.38%
1.26%
1.99%
2.13%
2.04%
1.93%
1.75%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Dec 2016
June 2016
Dec 2015
June 2015
CNBC Fed Survey – January 27, 2015 Page 14 of 30
FED SURVEY January 27, 2015
13. At what fed funds level will the Federal Reserve stop hiking rates in the current cycle? That is, what will be the terminal rate?
3.16% 3.20% 3.30%
3.17% 3.11%
Aug 20 Sep 16 Oct 28 Dec 16 Jan 27, '15
CNBC Fed Survey – January 27, 2015 Page 15 of 30
FED SURVEY January 27, 2015
14. When do you believe fed funds will reach its terminal rate?
0%
5%
10%
15%
20%
25%
30%
35%
40%
Aug 20 Sep 16 Oct 28 Dec 16 Jan 27 '15
Average:
Aug 20 survey:
Q4 2017
Sep 16 survey
Q3 2017
Oct 28 survey
Q4 2017
Dec 16 survey
Q1 2018
Jan 27 survey
Q1 2018
CNBC Fed Survey – January 27, 2015 Page 16 of 30
FED SURVEY January 27, 2015
15. How will lower oil prices affect U.S. GDP/core inflation in 2015?
0.27
-0.28
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30
GDP Inflation
Pct
. po
ints
CNBC Fed Survey – January 27, 2015 Page 17 of 30
FED SURVEY January 27, 2015
17. What is your forecast for WTI crude oil's lowest price in the current downturn?
$40
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Average Forecast
CNBC Fed Survey – January 27, 2015 Page 18 of 30
FED SURVEY January 27, 2015
18. The current decline in oil prices is primarily the result of:
56%
13%
28%
3%
0%
10%
20%
30%
40%
50%
60%
Excess supply Weak demand Equal parts excess
supply and weakdemand
Don't know/unsure
CNBC Fed Survey – January 27, 2015 Page 19 of 30
FED SURVEY January 27, 2015
19. Over the course of the announced new program, what will be the effect of European QE in the following areas relative to their current level?
6%
56%
50%
22%
31%
34%
41%
16%
44%
6%
31%
63%
66%
3%
34%
34%
94%
69%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
European inflation
European economic growth
European unemployment
European interest rates
U.S. interest rates
European stocks
U.S. stocks
Lower No change Higher
CNBC Fed Survey – January 27, 2015 Page 20 of 30
FED SURVEY January 27, 2015
20. Relative to your expectations, the QE program announced by the ECB was:
63%
9%
28%
0%
10%
20%
30%
40%
50%
60%
70%
More aggressive Less aggressive As expected
CNBC Fed Survey – January 27, 2015 Page 21 of 30
FED SURVEY January 27, 2015
21. The ECB will hit its 2% inflation target within:
3%
22%
34%
13% 13%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
One year Two years Three years Four years Five or moreyears
Don'tknow/unsure
CNBC Fed Survey – January 27, 2015 Page 22 of 30
FED SURVEY January 27, 2015
22. European QE announced Thursday makes a Fed rate hike:
25%
13%
63%
0%
10%
20%
30%
40%
50%
60%
70%
More likely Less likely No effect
CNBC Fed Survey – January 27, 2015 Page 23 of 30
FED SURVEY January 27, 2015
23. How much concern do you have that economic weakness in Europe could create wider global risks? (1=Not concerned at all, 10=Highest level of concern)
5.4 5.4
4.8 5.0
0
1
2
3
4
5
6
7
8
9
10
Sep 16 Oct 28 Dec 16 Jan 27 '15
CNBC Fed Survey – January 27, 2015 Page 24 of 30
FED SURVEY January 27, 2015
24. Has the U.S. stock market already discounted a fed funds rate hike by the Federal Reserve next year?
56%
36%
8%
53%
38%
9%
0%
10%
20%
30%
40%
50%
60%
Yes No Don't know/unsure
Dec 16 Jan 27
CNBC Fed Survey – January 27, 2015 Page 25 of 30
FED SURVEY January 27, 2015
25. What is the single biggest threat facing the U.S. economic recovery?
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
European recession/financial crisis
Tax/regulatory policies
Slow job growth
Inflation
Deflation
Debt ceiling
Rise in interest rates
Geopolitical risks
Global economic weakness
Slow wage growth
Other
Don't know/unsure
Europeanrecession/financial
crisis
Tax/regulatory
policies
Slow jobgrowth
InflationDeflationDebt
ceiling
Rise ininterest
rates
Geopolitical risks
Globaleconomicweakness
Slow wagegrowth
OtherDon't
know/unsure
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%
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
CNBC Fed Survey – January 27, 2015 Page 26 of 30
FED SURVEY January 27, 2015
FED SURVEY April 30,
Other responses:
"Fears" of inflation/overheat/is Fed behind the curve
Chinese economic or fiscal problems
Congress
Entitlements Rising dollar
26. In the next 12 months, what percent probability do you
place on the U.S. entering recession? (0%=No chance of recession, 100%=Certainty of recession)
Aug
11,201
1
Sep
19
Oct
31
Jan
23,201
2
Mar
16
Apr
24
Jul
31
Sep
12
Dec
11
Jan
29,201
3
Mar
19
Apr
30
Jun
18
Jul
30
Sep
6
Oct
29
Dec
17
Jan
28201
4
Mar
18
Apr
28
Jul
29
Sep
16
Oct
28
Dec
16
Jan
27'15
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
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%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Survey Dates
CNBC Fed Survey – January 27, 2015 Page 27 of 30
FED SURVEY January 27, 2015
FED SURVEY April 30,
27. What is your primary area of interest?
Comments: John Donaldson, Haverford Trust Co.: The FOMC is in a terrible spot here. They need to begin to normalize rates so they have the
full range of tools available if/when they need them in the next cycle. The markets seem to think that even adjusting policy rates to 1% is equivalent to an economy-choking tightening. No matter where the Fed takes the Funds rate, it would still be an exceptionally
accommodative policy. Mike Englund, Action Economics: As the world's central banks continue to swap sovereign term-debt with overnight central bank
reserve credit, forcing lenders to bid up the price of the remaining debt and equity instruments, it is likely that central banks are inflating term-asset values, but unlikely that they are increasing the willingness of investors to take risk. Indeed, risk-taking behavior for
direct investment is likely being trimmed, leaving these global strategies counter-productive at best.
Economics 53%
Equities 9%
Fixed Income 16%
Currencies 0%
Other 22%
CNBC Fed Survey – January 27, 2015 Page 28 of 30
FED SURVEY January 27, 2015
FED SURVEY April 30,
Kevin Giddis, Raymond James/Morgan Keegan: The U.S. economy is battling different forces in 2015 vs. 2014. Low wage growth and a lack of inflation pose more than idle threats to economic growth. If progress isn't made on both of these fronts,
then there is a risk, coupled with a global slowdown, that the U.S. growth rate would retreat to levels that could be compared to a recession.
Hugh Johnson, Hugh Johnson Advisors: Prospects for the U.S. stock market remain quite modest given (a) a growth rate for 2015 and 2016 S&P earnings of 4.4% and 4.5% respectively and (b) a modest shift toward restraint by the Fed (preventing multiple
expansion). This forecast is of course consistent with common sense after double-digit gains in each of the last two years. A higher return than 5% is possible if (a) earnings are stronger than forecast or (b) there is a surge in speculation in U.S. financial markets driven in part
by a stronger dollar. Not to be taken lightly or dismissed. The biggest risk, from the decline in oil and commodity prices, is the transmission of a Russian recession (deep recession in 2015) to Europe, China, and beyond although it is unlikely to derail the U.S.
expansion. With luck, we will muddle through. John Kattar, Ardent Asset Advisors: The Fed seems to have
decided to raise rates later this year, almost irrespective of the data. The greatest risk to that scenario is further and persistent dollar strength.
David Kotok, Cumberland Advisors: There is much more longer- term upside ahead from Eurozone QE. The bull market in stocks is not over.
Rob Morgan, V2V Associates: The media has focused intently on deflation lately. I think the most serious deflation problem involves the New England Patriots and footballs, not the deflation problem with worldwide economies.
CNBC Fed Survey – January 27, 2015 Page 29 of 30
FED SURVEY January 27, 2015
FED SURVEY April 30,
Joel Naroff, Naroff Economic Advisors: QE in Europe will only add to U.S. growth, lowering the unemployment rate and adding to the wage pressures that should ultimately raise inflation.
James Paulsen, Wells Capital Management: We enter 2015 with broad-based concerns about global deflation. Given the massive declines in sovereign bond yields about the globe and a large decline in energy costs, international and U.S. economic growth is likely to
improve in 2015. If global growth bounces, current deflation fears will likely fade and within the U.S., overheat fears may materialize as the unemployment rate heads below 5%. That is, could 2015 begin with deflationary fears and end with inflationary fears?
Lynn Reaser, Point Loma Nazarene University: As the Fed parts company with other central banks, it faces a potentially hazardous road. Oil could be especially slippery, giving the economy either
more or less growth and more or less headline inflation. John Ryding, RDQ Economics: In my judgment markets are underestimating the degree to which falling unemployment will push
the Fed to hiking rates and overestimating the influence of factors such as events in the euro area
Allen Sinai, Decision Economics: The ECB and other central banks are still running the show. The best is yet to come in global stock markets. The ECB action was absolutely brilliant monetary policy making.
Mark Vitner, Wells Fargo: We expect single-family homebuilding to be an upside surprise in 2015. On the downside, the dramatic rise in the value of the dollar and the global economic slowdown are
taking a toll on U.S. manufacturing. Exports are faltering and imports are rising. Scott Wren, Wells Fargo Advisors: The magnitude of the ECB's
CNBC Fed Survey – January 27, 2015 Page 30 of 30
FED SURVEY January 27, 2015
FED SURVEY April 30,
announced QE program is not a cure-all for Euro zone woes. It is likely more QE will follow the already announced amount. Structural issues in terms of the labor market and sovereign debt levels need to be addressed. The ECB is merely "pushing on a string" with this first
stab at reviving the economy and avoiding deflation. Solid, dependable improvement is going to likely take years....and more extreme action from the ECB and Euro zone governments.
Mark Zandi, Moody's Analytics: Despite all the cross-currents and heightened volatility in global financial and commodity markets, U.S. economic growth prospects remain strong.
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