CNBC Fed Survey Results: April 24, 2012

8/2/2019 CNBC Fed Survey Results: April 24, 2012

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CNBC Fed SurveyApril 24, 2012Page 1 of 27

FED SURVEYApril 24, 2012

These survey results represent the opinions of 53of the nations top money managers,

investment strategists, and professional economists.

They responded to CNBCs invitation to participate in our online survey. Their responses werecollected on April 19-20, 2012. 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 thosewho did accept our invitation.

1.Will there be another Federal Reserve quantitative easingprogram in the next year (12 months)?

19%

68%

13%

46%

37%

17%

34%

59%

7%

48%

46%

7%

48%

44%

8%

33%

63%

4%

33%

56%

12%

Yes

No

Don't know/unsure

July 20, 2011 August 11, 2011 September 19, 2011 October 31, 2011

January 23, 2012 March 16, 2012 April 24, 2012


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2.For those respondents who replied Yes to question #1:How large do you expect the new quantitative program

will be over the next year (12 months)? Please do notinclude reinvestment of maturing securities.

$377

$628

$527

$457

$567

$448$456

$0

$100

$200

$300

$400

$500

$600

$700

Average (In Billions)

July 20, 2011 August 11, 2011 September 19, 2011

October 31, 2011 January 23, 2012 March 16, 2012

April 24, 2012


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3.For those respondents who replied Yes to question #1: Atwhich meeting of the Federal Open Market Committee do you

think the Fed is most likely to announce a new QE program?

3%

33%

22%

28%

8%

6%

0%

0%

18%

45%

9%

9%

9%

9%

0%

0%

65%

18%

6%

6%

6%

0%

0% 10% 20% 30% 40% 50% 60% 70%

January 2012

March

April

June

July

September

October

December 2012

2013



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4.Which, if any, of the following additional actions do youthink the Fed will take to drive down long-term yields?

Respondents were able to select more than one response, so percentages total more than 100%

Other responses:

Unsterilized LSAP including Treasuries and MBS

25%

39%

11%

43%

12%

25%

35%

15%

42%

2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Extend

'OperationTwist' beyond

June

Purchase

additional long-term securities

but sterilizethose purchases

Reduce the

interest ratepaid on excess

reserves

None Other

March 16, 2012 April 24, 2012


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5. Do you expect the Federal Reserve to keep interest ratesexceptionally low through late 2014?

40%

57%

3%

49% 49%

2%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't Know/Unsure

March 16, 2012 April 24, 2012


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6.Relative to current fundamentals, the Federal Reserve'scharacterization of the economy in its policy statement is:

33%

63%

5% 0%

25%

64%

9%

2%

0%

10%

20%

30%

40%

50%

60%

70%

Too pessimistic Just right Too optimistic Don't know/unsure

March 16, 2012 April 24, 2012


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7.Which of these statements best describes your view of theFed's calendar-date guidance in its policy statement (that

it expects to keep interest rates exceptionally low throughlate 2014)?

42%

38%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

It was a mistake that couldundermine the Fed's

credibility

It was a good decision thathas helped drive down

interest rates

Don't Know/Unsure


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8.When Fed Chairman Ben Bernanke's term ends in 2014, doyou expect he will be renominated:

29%

2%

35% 35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

By either a

Democratic or

Republicanpresident

By only a

Republican

president

By only a

Democratic

president

He won't be

renominated by

either a Democraticor Republican

president


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9.Do you expect Bernanke will be the Fed Chairman after hiscurrent term expires in 2014?

34%

55%

11%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't know/unsure


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10.If Bernanke is not renominated, please write in a namethat you expect will be nominated to be Fed Chairman by a

Republican president.

3%

10%

10%

26%

3%

16%

29%

3%

0% 5% 10% 15% 20% 25% 30% 35%

Mike Boskin

Martin Feldstein

Richard Fisher

Glenn Hubbard

Donald Kohn

Greg Mankiw

John Taylor

Paul Volcker


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If Bernanke is not renominated, please write in a name that

you expect will be nominated to be Fed Chairman by aDemocratic president.

7%

7%

3%

3%

3%

3%

3%

20%

3%

3%

43%

0% 10% 20% 30% 40% 50%

Alan Blinder

Bill Dudley

Roger Ferguson

Timothy Geithner

Austan Goolsbee

John Maynard Keynes

Christina Romer

Larry Summers

Paul Volcker

John Williams

Janet Yellen


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11.How would you characterize the Fed's current monetarypolicy?

41%

52%

3%

5%

26%

52%

12%

10%

39%

40%

12%

9%

34%

48%

10%

8%

37%

45%

12%

5%

53%

38%

6%

4%

36%

51%

8%

6%

0% 10% 20% 30% 40% 50% 60%

Too accommodative

Just right

Too restrictive

Dont know/Unsure



April 24, 2012


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12.Where do you expect the S&P 500 stock index will be on ?

This is the third survey in which we asked for a December 31, 2012 forecast.

1421

1310

13121358

1329

1387

1397

1436

1372

1400

June 30, 2012

December 31, 2012



April 24, 2012


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13.What do you expect the yield on the 10-year Treasurynote will be on ?

This is the third survey in which we asked for a December 31, 2012 forecast.

3.75%

2.99%

2.59%

2.77%

2.19%

2.52%

2.32%

2.59%

2.15%

2.40%

June 30, 2012

December 31, 2012



April 24, 2012


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14.What is your forecast for the year-over-year percentagechange in real U.S. GDP?

This is the second survey in which we asked for a 2013 forecast.

+2.85%

+2.47%

+2.24%

+2.37%

+2.45%

+2.59%

+2.46%

+2.74%

+2.39%

+2.55%

2012

2013



April 24, 2012


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15.When do you think the FOMC will first increase the fedfunds rate?

0%

1%

1%

8%

5%

18%

14%

11%

14%

10%

4%

3%

10%

3%

0%

2%

9%

7%

15%

11%

11%

15%

13%

6%

4%

9%

0%

0%

0%

4%

4%

9%

11%

9%

13%

9%

15%

8%

13%

4%

0% 5% 10% 15% 20%

2012 - Q1

Q2

Q3

Q4

2013 - Q1

Q2

Q3

Q4

2014 - Q1

Q2

Q3

Q4

2015 or later

Don't know/unsure



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16.In the most recent quarterly Fed forecast, six of the 17members of the Federal Open Market Committee said they

believe the first fed funds increase will come in 2013. Inthe next quarterly Fed forecast, how many members doyou expect will say 2013?

0%

10%

20%

30%

40%

50%

60%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Average:

6.27


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17.When do you think the Federal Reserve will make its firstplanned decrease in the size of its balance sheet?

0%

3%

3%

10%

12%

11%

11%

4%

14%

10%

3%

1%

18%

3%

2%

0%

9%

20%

9%

13%

11%

9%

2%

4%

2%

16%

4%

2%

0%

6%

10%

10%

18%

8%

4%

4%

6%

0%

27%

6%

0% 5% 10% 15% 20% 25% 30%

2012 - Q1

Q2

Q3

Q4

2013 - Q1

Q2

Q3

Q4

2014 - Q1

Q2

Q3

Q4

2015 or later

Don't know/unsure



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18.Where do you expect the fed funds target rate will be on ?

This is the third survey in which we asked for a June 30, 2013 forecast.

0.47%

1.01%

0.13%

0.25%

0.16%

0.27%

0.22%

0.35%

0.14%

0.20%

0.41%

0.14%

0.23%

0.42%

0.16%

0.17%

0.27%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

June 302012

Dec 31

2012

June 302013



April 24, 2012


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19.In the next 12 months, what percent probability do youplace on the U.S. entering recession? (0%=No chance of

recession, 100%=Certainty of recession)

34.0%

36.1%

25.5%

20.3%19.1%

20.6%

August 11, 2011 September 19, 2011 October 31, 2011



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

Other responses:

Housing/shadow inventory overhang Deleveraging & deficit reduction Lingering headwinds from the crisis Political uncertainty, taxes, Europe, gas prices, people

afraid of their own shadows

Sluggish nominal growth/inadequate monetarystimulus

Politics

17%

36%

4%

26%

4%

2%

11%

37%

27%

8%

8%

4%

0%

17%

0% 5% 10% 15% 20% 25% 30% 35% 40%

European recession/financial crisis

Tax/regulatory policies

Slow job growth

High gasoline prices

Overall inflation

Don't know/unsure

Other:

March 16, 2012 April 24, 2012


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2013 fiscal cliff (2) Clogged foreclosure process21.What is the chance that high oil prices cause another U.S.economic recession? (0%=No chance of recession,

100%=Certainty of recession)

0%

5%

10%

15%

20%

25%

30%

35%

40%

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

Average Probability

Mar 16, 2012: 23.8%April 24, 2012: 21.8%


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22.What is your primary area of interest?

Comments:

David Ader, CRT Capital Group: The sad fact is the Fed is going at this alone.

They may be right, they may be wrong, about the consequences of their effortsto support the economy. But the real failure, the real mistake, is that the

politicians can't come up with a plan. They rant, they bicker, but dig their heels

in at ideological extremes and end up doing nothing. At least the Fed is trying.

John Augustine, Fifth Third Asset Management: The Fed put the 2014 date

in because they are very concerned about fiscal policy in 2013 taking the

economy into recession.

Dean Baker, Center for Economic and Policy Research: Economists have to

learn to understand the weather. The strong numbers in the winter were verymuch weather driven. The weak numbers we're seeing now is payback.

Kevin Caron, Stifel, Nicolaus/Washington Crossing Advisors: The

economy is getting better -- more private jobs, more private investment.

Continued success requires hastening the transition from public led recovery to

private led expansion.

Economics

55%

Equities19%

FixedIncome

13%

Currencies19%

Other

13%


24/27



Kevin Giddis, Raymond James/Morgan Keegan: Over the next six months

the market will likely determine where the Fed stands, and whether Europe can

be contained, or if its just the beginning of a prolonged and damagingrecession.

Dan Greenhaus, BTIG:Unfortunately its nearly impossible for us in markets

to forecast this sort of stuff when those with their hands on monetary levers of

power dont even know themselves.

Lee Hoskins, Pacific Research Institute: Fed policy continues to misallocate

capital, build bubbles, and hinders rather than helps real growth.

Constance Hunter, AXA Investment Managers: The U.S. economy is still inrehab. It can stand without crutches, but it cannot move forward without them.

The problem is that monetary policy alone cannot move the shadow inventory of

housing through the system and exceptionally low interest rates for such an

extended period of time could cause distortions in capital allocation (in the U.S.

and abroad) that have problematic ramifications down the road. Monetary

policy has kept us out of a vicious circle of deflation, but it has yet to ignite

strong fixed asset investment, strong hiring, and a recovery in the housing

market.

Hugh Johnson, Hugh Johnson Advisors: As I crunch the numbers, inflation

(PCE%) will be higher in 2013 than Federal Reserve is forecasting, prompting a

shift toward restraint, and tax and spending policy should shift toward restraint

(hopefully not aggressively) in 2013. This combination is likely to impede equity

price moves in Q4 and 2013.

John Kattar, Eastern Investment Advisors: The window is closing on the

Fed's flexibility to do something dramatic before the election. I expect them to

broadly hint at the possibility of QE at next week's meeting, just to keep options

open. But it will probably require much worse news (lower stock market, badeconomic data, or European crisis) to get them to act. The likelihood is now

below 50%, and most likely timing is May inter-meeting.

Barry Knapp, Barclays PLC: Equity investors seem to believe the FOMC

decision process is a 2 variable model best illustrated by the Okun's Law

conundrum and have not considered the 3rd variable, inflation. Additionally the


25/27



S&P 500 above 1400 was discounting the strong labor data in January &

February rather than softer GDP tracking estimates as evidenced by the sharp

rally in the consumer discretionary sector. As a consequence of thatfundamental mispricing of the economic outlook and misunderstanding of Fed

policy, the FOMC meeting and GDP report could be seminal moments with

equities likely to sell off.

David Kotok, Cumberland Advisors: These are extraordinary times.

Confidence intervals around forecasts are wider than ever.

Subodh Kumar, Subodh Kumar & Associates: Tougher standards are now

needed on composition of company earnings and on risk premiums in bonds. QE

is not the cure-all markets seem to assume. In turn, the Fed has to obfuscateless on QE value and its side effects so as to broaden the tools it uses.

Joseph LaVorgna, Deutsche Bank: Energy prices would have to rise

significantly and stay at an elevated level for a couple of quarters in order for us

to become more concerned about recession. In our view, north of $150 on WTI

is the point at which recession risk rises materially.

Guy LeBas, Janney Montgomery Scott: The "eco-phoria" present this winter

is finally beginning to fade as the markets recognize that the above-trend

economic numbers were the result of unseasonably warm weather. That will

result in additional caution, though slow growth rather than recession is the

most likely outcome.

Ward McCarthy, Jefferies: There are upside organic risks to the economy.

The downside risks are all political.

Rob Morgan, Fulcrum Securities: Is it really a good idea for the Fed to

publish quarterly the interest rate forecasts of the individual rate setters? In

January, six of 17 rate setters said they think rates will rise in 2013. What if

eventually a majority say that, but the pronouncement continues to state that

rates will stay constant until 2014?

James Paulsen, Wells Capital Management: There is no longer an economic

crisis in the U.S. Why, therefore, is the Fed still employing emergency or crisis

policies? Zero interest rates, $1.5 trillion excess bank reserves, QE policies, and


26/27



guaranteed interest rates are not policies appropriate for a recovery. The Fed

needs to move beyond its crisis mindset and appropriately normalize policy to

reflect the maturation of the U.S. economic cycle from crisis to recovery. Failureto do so soon risks creating another crisis -- an inflation crisis!

Lynn Reaser, Point Loma Nazarene University: Some payback from the

mild weather boost from earlier in the year is now likely to weigh on many

economic indicators in coming weeks. Bears will celebrate while bulls express

denial. The Fed will stay on the sidelines, waiting for more data to emerge after

the fog lifts.

John Roberts, Hilliard Lyons: We have changed to a bullish stance in the near

term due to Q1 earnings coming in well above very low expectations. However,beyond that we anticipate a pullback in the equity markets through the election

due to nasty political rhetoric, slowing corporate profit growth, and lower

consumer spending.

Chris Rupkey, Bank of Tokyo-Mitsubishi: The media is keeping this

recession story/looming crisis story/downside risks story alive, and thank

goodness as it keeps me employed writing why the world is not going to end

tomorrow. The interesting thing to me is how people have the same concerns

they had at the end of last summer even though the S&P 500 is up almost 10%YTD.

Diane Swonk, Mesirow Financial: Bernanke has been vindicated on the Fed's

forecast, with growth now giving back some of the seasonal strength we saw

earlier in the year, but I can't imagine he wants to stick around for another term

of shenanigans by our political leadership.

Mark Vitner, Wells Fargo: The Fed's efforts at becoming more transparent

may have actually increased uncertainty about future monetary policy. Too

many people view the Fed's forecasts of short-term interest rates as acommitment to keep long-term interest rates near current levels, possibly

putting off key financial decisions.

Mark Zandi, Moody's Analytics: The current lull in economic activity will likely

prove temporary and additional monetary stimulus unnecessary, but given the


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still considerable downside risks it is appropriate for the Federal Reserve to have

a bias toward further action.

Clare Zempel, Zempel Strategic: The fundamental limitation on the

recovery/expansion's pace is the Fed's refusal to support nominal GDP growth

above 4%. That refusal reflects misguided acceptance of the overly pessimistic

consensus belief that post-bubble expansions are necessarily and and

unalterably weak.

CNBC Fed Survey Results: April 24, 2012

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