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FED SURVEY

October 27, 2015


These survey results represent the opinions of 41 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 October 22-23, 2015. 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. Will the Federal Reserve raise the federal funds rate at


its October meeting?
100%

95%

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

0%

5%
0%
Yes

CNBC Fed Survey October 27, 2015


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No

Don't know/unsure

FED SURVEY
October 27, 2015
2. Will the Federal Reserve raise the federal funds rate in
2015?

FED SURVEY
April 30, Yes

No

Don't know/unsure

100%

92%
90%

84%

82%

80%

80%

70%

67%
60%

50%

46%
44%

40%

30%

23%
20%

15%
11%

10%

5%

9%

10%

10%

Aug 25

Sep 16

Oct 27

5%

0%

Apr 28

Jun 16

Jul 28

CNBC Fed Survey October 27, 2015


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FED SURVEY
October 27, 2015
3. If the Fed does not hike this year, which two factors from
the following list do you believe will most likely be the
reason?FED SURVEY
April 30,
Jun 16

Aug 25
0%

Sep 16
10%

Oct 27

20%

30%

40%

50%

60%

70%

32%
57%

Weak overseas growth

61%
60%

59%
60%

Declining inflation

55%
53%

47%
24%

Weak US economic growth

16%
35%

12%
29%

Concern over market reaction to a hike

31%
15%

32%
Weak payroll growth

7%
10%
3%

CNBC Fed Survey October 27, 2015


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FED SURVEY
October 27, 2015
4. How serious a concern is China for the US economy?

1=Not seriou s at all1=Not serious at all

0%

Aug 25

FED SURVEY
5%

0% April
0%
3%

10%

21%
20%

10%

16%
18%

12%
10%
10%
12%
12%

20%
16%
18%

3%

0%
0%
0%

10

0%
0%
0%

6%

CNBC Fed Survey October 27, 2015


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25%

30%

16%

8%

10=Highest level of seriousness

Oct 27
20%

30,

7%

Sep 16
15%

20%

16%

Averages:
Aug 25: 5.1
Sep 16: 4.6
Oct 27: 4.7

28%

FED SURVEY
October 27, 2015
5. Is the Fed paying too much attention to extreme market
swings in setting the appropriate monetary policy?

FED SURVEY Sep 16

70%

Oct 27

April 30,

60%

60%

49%

50%

43%
40%

40%

30%

20%

8%

10%

0%

0%
Yes

CNBC Fed Survey October 27, 2015


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No

Don't know/unsure

FED SURVEY
October 27, 2015
6. What best describes your view of communication from
Fed chair Janet Yellen and from Fed governors and
FED
presidents
ofSURVEY
their views on monetary policy?
April 30,

Yellen

Sep 16

Oct 27

90%
80%
70%
60%

50% 50%

50%

34%

40%
30%
20%
10%

20%

25%

8%

8% 5%

0%
Talks too much

Fed govs/pres
90%

Sep 16

Talks the right


amount

Don't know/unsure

Oct 27

80%

80%
70%

Don't talk enough

64%

60%
50%
40%

28%

30%
20%

13%
4% 5%

10%

4% 3%

0%
Talk too much

Don't talk enough

CNBC Fed Survey October 27, 2015


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Talk the right


amount

Don't know/unsure

FED SURVEY
October 27, 2015
7. Where do you expect the S&P 500 stock index will be on
?

FED SURVEY
December 31, 2015
April 30,

December 31, 2016

2,350

2311

2296

2293

2,300

2259

2254

2,250

2247
2194 2187

2,200

2149
2,150

2159

2,100

2,050

2166

2156 2159

2111

2135

2128

2079

2075

2032
2,000

1,950

1,900
Jul 29 Sep 16 Oct 28 Dec 16 Jan 27 Mar 17
'15
Survey Dates

CNBC Fed Survey October 27, 2015


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Apr
282

Jun 16 Jul 28

Sept
16

Oct 27

FED SURVEY
October 27, 2015
8. What do you expect the yield on the 10-year Treasury
note will be on ?

FED SURVEY
December 31, 2015

December 31, 2016

April 30,
4.0%

3.52%
3.5%

3.43% 3.45%

3.24%

3.17%

3.14%
3.19%
3.0%

3.04%

2.96%
2.89%

2.88%
2.64%

2.57%

2.67%

2.62%

2.5%

2.54%
2.40%
2.33%
2.20%

2.0%
Jul 29 Sep 16 Oct 28 Dec 16 Jan 27 Mar 17 April
'15
28
Survey Dates

CNBC Fed Survey October 27, 2015


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Jul 16 Jul 28

Sept Oct 27
16

FED SURVEY
October 27, 2015
9. What is your forecast for the year-over-year percentage
change in real U.S. GDP for ?

FED SURVEY

2015

April 30,

2016

3.4%

3.2%
+3.02%

+3.02%

+3.00%

3.0%

+2.99%

+2.90% +2.90%

+2.90%

+2.88%

2.8%

+2.84%

+2.81%

+2.80%

+2.81%

+2.75%

+2.78%

+2.69% +2.70%

+2.70%

2.6%

+2.64%
+2.60%
+2.41%

+2.43%

2.4%
+2.32%
+2.25%

2.2%

2.0%

Jan
28,
'14

Mar
18

Apr
28

Jun 4 Jul 29

Sep
16

Oct
28

Dec
16

Jan
27,
'15

Mar
17

April
28

Jun
16

Jul 28

Sept
16

Oct
27

2015 +2.90 +3.02 +3.00 +2.81 +2.75 +2.90 +2.90 +3.02 +2.99 +2.69 +2.70 +2.25 +2.41 +2.43 +2.32
2016

CNBC Fed Survey October 27, 2015


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+2.88 +2.80 +2.84 +2.81 +2.78 +2.70 +2.64 +2.60

FED SURVEY
October 27, 2015
10.
What is your forecast for the year-over-year
percentage change in the headline U.S. CPI for ?

FED SURVEY

2015

April 30,

2016

2.5%
2.29%2.27%

2.29%
2.17%

2.17%

2.08%
2.0%

2.01%

2.07%

2.02%

1.96%
1.89%
1.74%

1.75%

1.5%

1.17%
1.10%
1.17%
1.0%
1.01%1.00%
0.83%

0.63%

0.5%
Jun 4 Jul 29

Sep Oct 28 Dec


16
16

Jan
27,
'15

Mar
17

Survey Dates

CNBC Fed Survey October 27, 2015


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April Jun 16 Jul 28 Sept Oct 27


28
16

FED SURVEY
October 27, 2015
11.
When do you expect the Fed to hike the fed funds
rate and allow its balance sheet to decline?

FED SURVEY
April 30,

Survey Date

Fed Funds Hike


Average Forecast

Balance Sheet
Average Forecast

April 28, 2014 survey

July 2015

October 2015

June 4 survey

August 2015

March 2016

July 29 survey

August 2015

December 2015

August 20 survey

July 2015

Not asked

September 16 survey

June 2015

December 2015

October 28 survey

July 2015

January 2016

December 16 survey

July 2015

February 2016

Jan. 27, 2015 survey

September 2015

April 2016

March 17 survey

August 2015

April 2016

April 28 survey

October 2015

May 2016

June 16 survey

October 2015

July 2016

July 28 survey

November 2015

June 2016

August 25 survey

January 2016

September 2016

September 16 survey

November 2015

August 2016

October 27 survey

March 2016

November 2016

CNBC Fed Survey October 27, 2015


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FED SURVEY
October 27, 2015
12.
How would you characterize the Fed's current
monetary policy?

FED SURVEY
Just right

Too accommodative

April 30,

70%

Too restrictive

Don't know/unsure

64%
60%

60%

Too accomodative
54%
49% 49% 49% 49%

50%
43%

50%
47%

44%

47%

46%
43% 44%

43%

40%

50% 50%

54%

39%
35%

32%

32%

30%

Just right
28%
23%
20%

17%
Don't know/unsure

10%

13%
6%

6%

5%

3%
3%

0%

10%

8%

3%

6%
6%

3%

3%

8%
6%

3%

3%
5%
Too restrictive

6%
0%

Jul 31, Jul 29, Aug 20Sep 16 Oct 28 Dec 16 Jan Mar 17 Apr 28 Jun 16 Jul 28
'12
'14
27, '15

CNBC Fed Survey October 27, 2015


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4%

5%

Sept Oct 27
16

FED SURVEY
October 27, 2015
13.
Where do you expect the fed funds target rate will
be on ?
2.5%

FED SURVEY
April 30,

2.13%

1.99%

2.04%

2.0%

1.93%
1.84%
Dec 2016

1.75%
1.56%

1.5%
1.46%

1.41%

1.17%
1.05%

1.0%

0.99%

0.97%
0.92%

1.12%

0.98%
0.89%
0.83%

0.82%

0.91%

0.89%

0.73%
0.71%

0.83%
0.70% 0.72%

0.68%

0.5%

Dec 2015
0.54%
0.53%
0.47%

0.37%

0.25%

0.0%

CNBC Fed Survey October 27, 2015


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FED SURVEY
October 27, 2015
14.
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%
3.16%

3.17%
3.11%
3.04%

3.06%
2.98%

3.0%

2.85%

2.79%
2.69%

2.65%

2.5%

2.0%
Aug
20

Sep
16

Oct
28

Dec
16

Jan
27,
'15

Mar
17

Apr
28

Survey Dates

CNBC Fed Survey October 27, 2015


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Jun Jul 28 Aug


16
25

Sept
16

Oct
27

FED SURVEY
October 27, 2015
15.
When do you believe fed funds will reach its
terminal rate?

FED SURVEY
April 30,

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

CNBC Fed Survey October 27, 2015


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FED SURVEY
October 27, 2015
16.
Has the U.S. stock market already discounted a fed
funds rate hike by the Federal Reserve this year?

FED SURVEY
Yes
April 30,

70%

No

Don't know/unsure

61%

Yes

60%
56%
53%

55%

53%

50%

59%
56%

50%

50%
47%

47%

40%
36%

39%

38%

38%

No

30%

38%

36%
33%

20%

Don't know/unsure
12%
10%

8%

10%

9%

6%

8%

3%

0%

0%

0%

Dec 16

Jan 27

Mar 17

Apr 28

CNBC Fed Survey October 27, 2015


Page 16 of 31

Jun 16
Jul 28
Survey dates

Aug 25

Sep 16

Oct 27

FED SURVEY
October 27, 2015
Has the U.S. bond market already discounted a fed funds
rate hike by the Federal Reserve this year?

FED SURVEY
Yes
April 30,

80%

No

Don't know/unsure

No

70%

72%

67%
62%

60%

60%

56%
52%

50%

40%

43%

42%

40%
35%

33%

30%

Yes
26%

20%

Don't know/unsure
10%
3%

3%

5%

0%

3%
0%

0%
Apr 28

Jun 16

CNBC Fed Survey October 27, 2015


Page 17 of 31

Jul 28
Aug 25
Survey dates

Sep 16

Oct 27

FED SURVEY
October 27, 2015
17.
What is the single biggest threat facing the U.S.
economic recovery?

20%
15%
8%
4%
8%
5%

31%
28%
30%
27%
29%
32%

20%
20%
22%
22%
24%
29%

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

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

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

7%
10%
3%
12%
6%
31%
40%

21%
23%
26%
29%
26%
18%
14%

30%
26%
21%
12%
29%
15%
14%

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

0%
5%
5%
3%
3%
3%
6%

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

13%
14%
11%
17%
21%
16%
8%

9%
0%
8%
3%
9%
2%
5%

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

0%
6%
0%
0%
0%
4%
8%

CNBC Fed Survey October 27, 2015


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Don't know/
unsure

Other

Slow wage growth

Geopolitical risks

Rise in interest rates

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

European recession/
financial crisis

April 30,

Global econ weakness

FED SURVEY

10%
18%
8%
15%

11%
13%
14%
7%
13%
2%

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

0%
0%
0%
0%
0%
0%
0%

12%
5%
8%
12%
6%
10%
3%

18%
12%
11%
8%
14%

21%
18%
13%
12%
11%
8%
3%

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

0%
0%
0%
0%
0%
0%
0%

6%
6%
6%
14%
12%
0%
8%

16%
8%
11%
25%
6%
8%
13%

16%
14%
19%
11%
9%
14%
5%

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

41%
28%
28%
22%
29%
45%
41%

6%
17%
8%
6%
9%
8%
10%

FED SURVEY
October 27, 2015
18.
What are the biggest risks to maintaining zero
rates? (Please rank your current concern over these
FED
SURVEY
risks from
biggest
concern to lowest concern.)
April 30,
1

49%

33%
0

8%
5%

5%

Other

No risk to
maintaining
zero

0
Financial
bubbles

Less defense
against future
shocks

The Fed's
credibility
Score

Note: Higher score=bigger concern. Score is a weighted sum of the rankings where a #1 rank is
weighted the most heavily and a #5 rank is weighted the least heavily.

CNBC Fed Survey October 27, 2015


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FED SURVEY
October 27, 2015
19.
What grade would you give Janet Yellen as Fed chair
so far? FED SURVEY
April 30,
Apr 28 '14

Apr 28 '15

Oct 27

60%

Averages:

51%
50%
49%

50%

Apr '14

B- (2.71)
Apr '15

40%

B+ (3.17)

36%
33%

Oct '15

B-/C+ (2.49)

30%

23%
20%

11%

10%
10%

8%
5%
3%
0%

0%
A

Numerical average based on A=4, B=3, C=2, D=1, F=0

CNBC Fed Survey October 27, 2015


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5%
3% 3%

FED SURVEY
October 27, 2015
20.
Please grade how Janet Yellen is doing as Fed chair
in the following areas, using a scale of 5 stars (best) to 1
FED SURVEY
star (worst).
April 30,
Apr '14

Apr '15

Oct '15

5.00

4.50

3.89

4.00

3.50

3.27

3.83

3.26
3.06

3.00

2.90

2.50

2.00

1.50

1.00

0.50

0.00
Leadership

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Communication

FED SURVEY
October 27, 2015
21.
Comments on Janet Yellens performance as Fed
chair:

FED SURVEY

Dean Baker, April


Center
30,for Economic and Policy Research: The
recent speech by Lael Brainard is a sharp warning against raising
rates. She made a very solid argument. This presents Yellen with a
very real challenge. She will either have to stand up and say that
Brainard is essentially right and put a rate hike on hold, or she will
have to come up with a very good case as to why it is urgent for the
Fed to be looking to raise rates. This is big moment in her tenure as
Fed chair.
Jim Bianco, Bianco Research: If the Feds policy was to
intentionally confuse the market how would it differ from what
they're doing now?
Peter Boockvar, The Lindsey Group: She needs to throw away
her econometric models and have more faith in the regenerative
powers of the US economy and our free market system.
Robert Brusca, Fact and Opinion Economics: The Fed has a
policy statement that defines the conditions for a rate hike. By
allowing FOMC members to speak off the cuff about what they think
is appropriate for policy even though it may not conform to the Fed's
own policy rule is confusing. Yellen needs to find a way to corral
speakers that stray from the Fed's own expressed rules because it
only confuses markets. We do NOT have problems with the
frequency of Yellen's talking or of other FOMC members talking.
What we have is confusion about what they are saying and what that
really means. It was not until Fischer's speech in Peru at the IMF
meeting that the Fed clarified that public statements were not policy
and that Fed member expectations (say... of a rate hike by year
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FED SURVEY
October 27, 2015
end) are not a commitment but that the policy statement is the Fed's
commitment. Saying that sooner could have helped the markets
FED said
SURVEY
greatly. Had Yellen
it instead of Fisher it might have carried
April 30,
more weight.
John Donaldson, Haverford Trust Co.: The FOMC missed a clear
opportunity to move off zero interest rate policy in September. Their
communication has added to, rather than lessened, market
confusion. They need to speak with one voice instead of the
cacophony that we are currently hearing.
Kevin Giddis, Raymond James/Morgan Keegan: I think that
Janet Yellen has taken the proper measured approach in pushing the
FOMC to do the "right" thing, not raising rates until it is time. She
has faced down her critics, but also knows that it won't be long until
the Committee must act. I give her high marks for her patience.
Art Hogan, Wunderlich Securities: Yellen is doing a good job in a
tough position. Fiscal policy would go a long way to help the
economy. She is not my favorite stock picker.
Constance Hunter, KPMG LLP: Dr. Yellen is faced with the difficult
job of stimulating balanced growth in the absence of modestly
stimulative fiscal policy. Meanwhile both structural and cyclical
disinflationary forces are creating noise around the signal of prices.
Add to this the apparent lack of productivity growth and it is an
exceptionally challenging time to be a central banker.
Hugh Johnson, Hugh Johnson Advisors: Chairman Yellen is doing
a credible job providing leadership, communicating policy, and
maintaining a sensible-balanced understanding of both domestic and
global financial markets and economic events. It is quite positive
that she has steered the Fed away from rigid quantitative targets for
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FED SURVEY
October 27, 2015
policy to a far more qualitative and balanced approach. That is very
important in a world where the variables will not follow simple
FED SURVEY
historical patterns.
April 30,
Subodh Kumar, Subodh Kumar & Associates: Central banking
needs more aura of mystery and of decisiveness than currently
shown.
Donald Luskin, Trend Macrolytics: I got a kick out of that
microstroke she had on national TV a couple weeks ago. Smooth.
Rob Morgan, Sethi Financial Group: Janet Yellen has learned the
art of 'Fed Doublespeak' since she sent markets plunging after her
first press conference as Fed Chair on March 19, 2014.
Joel Naroff, Naroff Economic Advisors: She appears indecisive,
even if she knows what she wants to do.
John Roberts, Hilliard Lyons: She has boxed herself in by saying
that the Fed would be raising rates before the end of the year, and
will lose credibility with investors if the Fed does not increase rates,
as well as limiting its ability to act should there be any economic
shocks to the system.
Chris Rupkey, Bank of Tokyo-Mitsubishi: She hurts the
confidence of consumers and businesses by continuing to say the
economy is not good enough. She is not an elected official. And
please, can she stop calling the recent recession the "Great
Recession?" It was not as bad as the Great Depression and they
should not be tiptoeing around the economy like current business
conditions are fragile. She broke the cardinal rule. A normal
economy needs a normal interest rate. It is Fed policy that is off
course. It is Fed policy that is not normal.
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FED SURVEY
October 27, 2015
John Ryding, RDQ Economics: The Fed Chair needs to pay less
attention to market gyrations and more to the labor market and
FEDthat
SURVEY
inflation dynamics
she gives speeches on in drafting the policy
April 30,
statement. Her comment at the last press conference that housing
remained "very depressed" seemed out of touch with the data.
Allen Sinai, Decision Economics: Too much dissonance, too much
talking other than the Chairman is confusing markets. The attempt
at transparency is counterproductive.
Hank Smith, Haverford Investments: Yellen's only fumble so far
in her tenure has been communicating an expectation of raising the
Fed funds rate this year and not following through. She missed an
opportunity in September or earlier in the summer.
Diane Swonk, Mesirow Financial: Yellen's greatest challenge lies
ahead; communication policy needs to be a strength not a
vulnerability in the system
Mark Vitner, Wells Fargo: She is in a tougher position than most
previous Fed chairs and faces pressure from more constituencies.
Scott Wren, Wells Fargo Investment Institute: Chairwoman
Yellen has a tough road ahead of her. She has been and will
continue to be a dove. She knows there is still slack in the labor
market (otherwise we would see more wage pressure)....and that is
likely to be the biggest factor driving the pace of rate hikes (which
will be very slow). The Chairwoman has not really been tested yet
by the markets but at some point during this long normalization
process that will likely change.

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FED SURVEY
October 27, 2015
22.
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%

28.5%

25.9%

25%

26.0%

25.5%

22.1%

20%

20.3%

20.6%

20.4%

18.4%

18.2%

17.3%

19.1%

17.6%

15%

16.9%

18.6%
16.2%

17.4%

15.1%

16.9%
16.2%
15.2%

16.4%

15.3%

14.6%

15.1%

15.0%

14.7%
13.6%
13.0%

10%

5%

0%

Aug
Jan
Jan
Sep Oct
Mar Apr Jul Sep Dec
Mar Apr Jun
11,
23,
29,
19 31
16 24 31 12 11
19 30 18
'11
'12
'13

Jan
Jan
Jul Sep Oct Dec
Mar Apr Jul Sep Oct Dec
Mar April Jun Jul Sept Oct
28
27
30
6
29 17
18 28 29 16 28 16
17 28 16 28 16 27
'14
'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 16.4 14.7 15.1 17.4 18.6 22.1

Survey Dates

CNBC Fed Survey October 27, 2015


Page 26 of 31

FED SURVEY
October 27, 2015
23.

What is your primary area of interest?

FED SURVEY
April 30,
Currencies
0%

Other
18%

Fixed
Income
10%
Equities
15%

Economics
58%

Comments:
Robert Brusca, Fact and Opinion Economics: The Fed needs to
clarify in SIMPLE terms what it means. More talk is not better if it is
confusing talk. The Fed needs to take care not to promise beyond
what it can deliver. It needs to express simple understandable
objectives and to have those objectives reinforced with public
statements, not undermined by them. The current statement's
reference to inflation is too obscure. In an environment with weak
oil prices and falling commodity prices how could so many members
be 'reasonably' sure that inflation would get back to 2% over the
'intermediate term' by end-2015? This is the fact that is inconsistent
with a rate hike this year. It is not inconsistent but rather sane that
Fed members are backing away from these earlier strange and
unfounded declarations -especially after the papers that were
presented this year at Jackson Hole.
John Donaldson, Haverford Trust Co.: The earliest possible liftoff
CNBC Fed Survey October 27, 2015
Page 27 of 31

FED SURVEY
October 27, 2015
date for the FOMC is now January. That would likely require a good
to very good holiday season for consumer spending combined with a
SURVEY
winter withoutFED
a polar
vortex.
April 30,
Neil Dutta, Renaissance Macro Research: If the labor market
continues tightening and the Fed takes a pass at their December
meeting, there will have to be a wholesale change in strategy. They
would have to abandon the Phillips Curve as a rationale to boosting
their confidence in the inflation outlook. In that case, a March 2016
hike may prove to be too soon.
Mike Englund, Action Economics: The pegging of rates at the
zero-bound does more harm than good for the U.S. financial sector.
The first 50-100 basis points in tightening, if expectations of future
rate increases are contained, will be stimulative on net for the
economy.
Kevin Giddis, Raymond James/Morgan Keegan: The Fed
continues to act in an appropriate way, depending heavily on the
data vs. rhetoric. The fact is, the time to act is ahead of us, and the
Fed chair should get high marks for her vision and leadership.
Stuart Hoffman, PNC Financial Services Group: With U.S. stocks
back near recent highs and China easing monetary policy, solid job
reports for October and November will finally give the FOMC the
"confidence and courage" to start the funds rate on its slow accent
over the next 2-3 years.
Art Hogan, Wunderlich Securities: China data is stabilizing, thus
the FED should pull liftoff back into 2015.
Constance Hunter, KPMG LLP: Dr. Yellen is faced with the difficult
job of stimulating balanced growth in the absence of modestly
stimulative fiscal policy. Meanwhile, both structural (falling
healthcare costs due to a growing percent of the population on
CNBC Fed Survey October 27, 2015
Page 28 of 31

FED SURVEY
October 27, 2015
Medicaid/Medicare) and cyclical (falling commodity prices due to
China's negative demand shock) disinflationary forces are creating
FED
SURVEY
noise around the
signal
of prices. Add to this the apparent lack of
April 30,
productivity growth
and it is an exceptionally challenging time to be
a central banker.
Hugh Johnson, Hugh Johnson Advisors: No further comments
other than to simply reiterate that Chairperson Yellen is doing a
simply fine job during a complex and difficult time. Her ability to
integrate domestic and global financial and economic events into a
cohesive and sensible policy (in the face of considerable criticism) is
commendable. Navigating the next few years under slow domestic
economic conditions, historically low and gradually rising inflation,
and very volatile global economic and inflation conditions will be
challenging. This is particularly true when domestic fiscal policy will
not be helpful. Avoiding 1937-1938 conditions will be important.
Doable; and important.
John Kattar, Ardent Asset Advisors: Passing last meeting was a
mistake, but a hike this time would compound the error by signaling
that the Fed cares too much about market reaction in setting policy.
Subodh Kumar, Subodh Kumar & Associates: With defensive
valuation neither being offered by quintessential equities like
Consumer Staples nor by sovereign debt like U.S. Treasuries, we
multi-pod asset mix into equities for the next cycle, above average
cash, private investments where some control can be exerted and,
current convention notwithstanding, precious metals as hedge. We
see political stress, whether global or country or for that matter
corporate governance, as needing more attention and diversification.
In order to build flexibility and contain risk within our underweight of
fixed income, we favor placing holdings in short to medium duration
U.S. Treasurys, high quality corporate, as well as U.K. Gilts. In
equities, we believe complacency to be highly clam-like about
quantitative ease. We would expect lower than consensus earnings
CNBC Fed Survey October 27, 2015
Page 29 of 31

FED SURVEY
October 27, 2015
with more focus on quality of delivery. It is likely to mean elevated
volatility and channel-like equity market behavior into mid-2016,
FEDthe
SURVEY
which differs from
momentum focus of many. In equities overall,
Aprilbeing
30, determined worldwide by the heavy
we see leadership
weighting of Financial Services; by companies irrespective of sector
that have been restructuring earlier than their compatriots; and by
exposure to infrastructure (such as within industrials and information
technology) rather than consumer concept (whether in discretionary,
staples or social media). On valuation and concept fervor already
incorporated, we also now underweight Healthcare. We find duress
and restructuring within Energy and Materials to be sufficient to
make the stronger companies of interest as over weightings. Our
outlook likely also means a classic cycle, led by performance in the
United States equity market and, as is also traditional, stronger
emerging market performance being contingent on stronger global
GDP growth closer to 4% than the present 3% per year.
Guy LeBas, Janney Montgomery Scott: Between the ECB and the
People's Bank of China, 31% of the world's GDP has executed or
announced further easing. It's hard to imagine the Fed hiking rates
against the hurricane of foreign easing.
Ward McCarthy, Jefferies: The Fed faces a difficult, challenging
environment of balancing domestic and global policy considerations.
Rob Morgan, Sethi Financial Group: The Fed correctly avoided
beginning the rate hike campaign at its last meeting due to equity
market turmoil. The Committee will start the campaign in December.
Joel Naroff, Naroff Economic Advisors: The Fed's communication
has been inconsistent and is a major factor in the volatility in
markets. They should just do something and get it over with.
Lynn Reaser, Point Loma Nazarene University: Reports of
dissent within the Fed are straining its credibility at a time when
CNBC Fed Survey October 27, 2015
Page 30 of 31

FED SURVEY
October 27, 2015
global markets are desperate for leadership and a roadmap.

FED SURVEY
Allen Sinai, Decision
Economics: The Federal Reserve should get
on with it andApril
clarify30,
the game plan after the first hike.
Hank Smith, Haverford Investments: Throughout this expansion
it has paid to take the Fed at its word. Not following through with a
rate hike this year reduces the Fed's credibility.
Diane Swonk, Mesirow Financial: October represents an
opportunity for Yellen to show her skill in building a consensus; we
need to see a more cohesive message on policy going forward.
Mark Vitner, Wells Fargo: The economy is losing momentum in a
way that in the past has been consistent with the Fed cutting interest
rates, certainly not raising them. To my recollection, I believe the
Federal Reserve has cut the Federal funds rate every time that the
ISM manufacturing has fallen back below 50, which may occur in
early November. Unfortunately, they have no rates to cut.
Scott Wren, Wells Fargo Investment Institute: We continue to
argue that the Fed doesn't really have to do anything with rates in
the nearer term but wants to get the ball rolling on the normalization
process. One move in December and then two in the second half of
next year is our projection. US Growth is dependable and this
should be the Fed's main focus. There will always be an excuse to
not hike rates. The markets want certainty and the Fed is laying the
groundwork for a hike late this year....IMO that is why we have seen
the robust rally off the recent lows.
Mark Zandi, Moody's Analytics: There is an increasing risk that
the Federal Reserve will be too slow in beginning to normalize
interest rates, and will need to raise rates much more aggressively in
the future.

CNBC Fed Survey October 27, 2015


Page 31 of 31