SIFMA Roundtable of Economists Unveil Mid-Year 2017 Economic Outlook

Release Date: June 12, 2017
Contact: Carol Danko, 202.962.7390,

GDP Outlook Weakens Slightly; Business Spending and U.S. Fiscal Policy Key Factors:
SIFMA Roundtable of Economists Unveil Mid-Year 2017 Economic Outlook

Washington, DC, June 12, 2017 – SIFMA's Economic Advisory Roundtable forecasted that the U.S. economy will grow 2.1 percent in 2017, strengthening to 2.3 percent in 2018. The current outlook for 2017 is slightly weaker than the Roundtable's end-year 2016 prediction.

"The economy remains poised to expand at an above trend rate because past headwinds in the form of a stronger dollar, excessive inventories and plunging energy investment have effectively abated if not reversed," said Joseph LaVorgna, Chief US Economist, Deutsche Bank. "The post-election improvement in business and consumer confidence will also help boost aggregate demand. In turn this should keep downward pressure on the unemployment rate and the Fed on a gradual tightening path."

The Economy:

The median mid-year forecast called for 2017 gross domestic product (GDP) to grow by 2.1 percent on a year-over-year basis and on a fourth-quarter-to-fourth-quarter basis, weaker than the 2.2 percent and 2.1 percent predicted on both year-over-year and fourth-quarter-to-fourth-quarter basis in the end-year 2016 survey. 

Employment is expected to continue improving. Survey respondents predict the unemployment rate to average 4.4 percent in 2017 (compared to an expectation of 4.7 percent in the end-year 2016 survey) and 4.3 percent in 2018.  Employers are expected to add 2.1 million workers to their payrolls in 2017, falling to 1.8 million in 2018.

The forecast for 2017 "headline" inflation, measured by the personal consumption expenditures (PCE) chain price index, weakened slightly from the end-year 2016 forecast of 1.9 percent to 1.8 percent in the mid-year survey. For 2018, the PCE chain price index was expected to rise slightly to 1.9 percent.

Monetary Policy:                                       

All but one respondent expect the Federal Open Market Committee (FOMC) to raise the Federal Reserve's target rate range at the June 13-14, 2017 meeting.

Respondents were also nearly unanimous in expecting two rate hikes in 2017, including the hike in June. The dissenting respondent only expected one rate hike in 2017. Opinions were more varied for 2018, with half of respondents expecting three rate hikes, nearly a third (28.6 percent) expecting two rate hikes, about a fifth (19.0 percent) expecting four rate hikes, and the balance one rate hike.

Survey respondents considered labor market conditions the most important factor in the FOMC's decision to raise rates, followed by inflation or inflationary expectations. One respondent noted that political conditions could also be a factor.

Interest Rates:

When the survey was completed on June 2, 2017, the 10-year U.S. Treasury yield was 2.15 percent. The median survey forecasts for 10-year Treasury rates were: 2.43 percent for June 2017, 2.60 percent for September 2017, 2.70 percent for December 2016, 2.80 percent for March 2018 and 2.88 percent for March 2018.

Economic growth prospects were cited as the dominant factor impacting Treasury yields in the second half of 2017, followed by FOMC interest rate policy.

Risks to Growth: Consumer Spending and Housing on the Upside; Global Economic Weakness and Business Spending Declines on the Downside:

Business confidence was considered the most important factor impacting U.S. economic growth, followed by U.S. fiscal policy; Federal Reserve interest rate actions were noted as a third, albeit distant, factor as well.

Upside risks included fiscal stimulus, sooner-than-expected tax reform and business capital expenditures. On the downside, policy uncertainty/failure, tight financial conditions and geopolitical risk were the leading causes for concern.

U.S. Fiscal Policy:

Respondents were asked to rank a number of potential policy changes aired by the new Administration in terms of how likely there are to be enacted in 2017. Nearly a third (31.3 percent) considered tax policy to have the greatest chance of enactment, followed by changes to trade policies, immigration and the ACA, with infrastructure policy deemed likely by only one respondent. Only tax policy and infrastructure were expected by most to have a positive impact on economic growth, if enacted, while the impact of a policy change to immigration and to the ACA was seen as more negative.

 The full report is available at the following link:


SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit


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In New York:
Katrina Cavalli


 Liz Pierce



In Washington:

Carol Danko

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