Stuart Hoffman, senior vice president and chief economist for The PNC Financial Services Group and the 2016 Chair of SIFMA's Economic Advisory Roundtable, discusses the Roundtable's U.S. End-Year 2016 Economic Outlook.
The Roundtable forecasted that the U.S. economy will grow 1.6 percent in 2016, strengthening to 2.2 percent in 2017. The current outlook for 2016 and 2017 is slightly weaker than the Roundtable's mid-year prediction, although the range of the 2017 forecast is wider and skewed more to the upside.
- Interest Rates: The Roundtable expects the Federal Open Market Committee (FOMC) to hike the Federal Reserve's target rate range at the December 13-14, 2016 meeting.
- Risks to Growth: Fiscal stimulus, deregulation and tax reform were common themes among respondents on upside risks; protectionist trade policy was a leading downside risk, as was uncertainty over fiscal and other policies, such as restrictive immigration.
- Impact of Presidential Election: While 94 percent of respondents agreed that the election of Donald Trump increased fiscal policy uncertainty, when asked about the potential impact on 2017 GDP estimates, nearly two-thirds of respondents estimated an upward impact of up to 25 bps.
Survey results were gathered after the U.S. presidential election; OPEC's announcement of an agreement to cut oil production came at the very end of the survey period and may not be fully reflected in the forecasts.
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