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FED SURVEY

April 30, 2013


These survey results represent the opinions 46 of the nations top money managers, investment strategists, and professional economists. They responded to CNBCs invitation to participate in our online survey. Their responses were collected on April 25-26, 2013. 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. For all of 2013 and for all of 2014 (and only in 2014), what is the total amount of additional asset purchases the Federal Reserve will have made?
January 29
$0 $200 $400

March 19
$600 $800

April 30
$1,000 $1,200 $1,400

$858.8
2013

$917.0 $936.6

2014

$370.6

Billions

CNBC Fed Survey April 30, 2013


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FED SURVEY
April 30, 2013 2. What mix of Treasuries vs. mortgage-backed securities do you expect the Federal Reserve to purchase?
Treasuries
100%

MBS

90%

80%

47.8%

48.5%

46.7%

70%

60%

50%

40%

30%

52.2%

51.5%

53.3%

20%

10%

0%

January 29

March 19
Survey Dates

April 30

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FED SURVEY
April 30, 2013 3. When do you expect the Federal Reserve will completely stop purchasing assets?
January 29
40%

March 19

April 30

Averages
35%

Jan 29: Nov 2013 Mar 19: May 2014 Apr 30: July 2014

30%

25%

20%

15%

10%

5%

0% 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 - 2015 or Q4 later

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FED SURVEY
April 30, 2013 4. The Federal Reserve will:
January 29
100%

March 19
94% 89%

April 30

90%

80%

76%

70%

60%

50%

40%

30%

22%
20%

10%

8%

4%
Gradually reduce (taper) its purchases

2%

4%

2%

0% End its purchases in a single month Don't know/unsure

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FED SURVEY
April 30, 2013 (For those who believed the Fed will taper) In what month do you expect the Fed to begin tapering its purchases?
January 29
25%

March 19

April 30

Averages
20%

Jan. 29: Dec 2013 March 19: Jan 2014

15%

April 30: Feb 2014


10%

5%

0%

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FED SURVEY
April 30, 2013 5. At what unemployment/inflation rate will the Fed halt its asset purchases?
Unemployment Inflation

7%

6%

6.5%

6.8%

6.7%

6.4%

5%

4%

3.4% 2.6% 2.6% 2.7%

3%

2%

1%

0% December 11, 2012 January 29, 2013 March 19, 2013 April 30, 2013

Survey Dates

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FED SURVEY
April 30, 2013 6. When it comes to how you think the Fed will exit from its current monetary policy, do you believe it WILL:
March 19
60%

April 30

54% 53%
50%

40%

30%

29% 26%

20%

10%

9% 4% 4% 6%

8%

7%

0% Sell Treasuries only Sell MBS only Sell both Not sell any assets at all Don't know/unsure

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FED SURVEY
April 30, 2013 When it comes to how you think the Fed will exit from its current monetary policy, do you believe it SHOULD:
March 19
45%

April 30

41%
40%

37%37%
35%

35%

30%

25%

20%

15%

14% 13% 9% 6% 7%

10%

5%

2%
0% Sell Treasuries only Sell MBS only Sell both Not sell any assets at all Don't know/unsure

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FED SURVEY
April 30, 2013 7. When it comes to the Feds use of economic targets specifically:
January 29
60%

March 19

April 30

50%

48% 45% 41% 41%

40%

38%

30%

28%

28%

20%

15% 10% 4%
0% The Fed is clear The Fed could be more clear

10%

2% 0%

The Fed is not clear Don't know/unsure at all

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FED SURVEY
April 30, 2013
Comments on Question 7:
Dean Baker, Center for Economic and Policy Research: The Fed has been very clear as to what it will look at. It is keeping options open since it does not know exactly what the future will look like. Lou Brien, DRW Trading Group: I think the Fed should more clearly state that it is not completely clear to them how they will react to economic data in regards to their quantitative easing programs. It is more likely they will know it when they see it but it is not likely they will know it before then. Robert Brusca, Fact and Opinion Economics: Targets? Thresholds? Triggers? Stephen Gallagher, Societe Generale: Fed has clearly stated 6.5%, but risks credibility if they tie falling unemployment to technical factors later on. Hugh Johnson, Hugh Johnson Advisors: There are two important components of Federal Reserve policy. The first is the target for the federal funds rate, which is unlikely to change until 2015 even though (a) the unemployment rate should be at or near 6.5% Q4 2014 and the outlook for 2015 inflation should be near 2.5% Q4 2014. The second component is QE (asset purchases). My expectation is that, depending on economic variables, the process of "tapering" asset purchases could begin in September 2013 and essentially lead toward the end of QE mid-2014. Alan Kral, Trevor Stewart Burton & Jacobsen: The Fed can justify anything it wants at any time. William Larkin, Cabot Money Management: Targets change as economic conditions shift. Guy LeBas, Janney Montgomery Scott: It's hard to trust an economic target, when the Fed, in the same day as issuing a target, also qualified it heavily. Donald Luskin, Trend Macrolytics: The targets are a sham. They create the illusion of precision in a regime of total discretion. Rob Morgan, Fulcrum Securities: The Fed is clear in its use of economic targets. I'm just not sure they are wise in using economic targets. Joel Naroff, Naroff Economic Advisors: The Fed needs to make it clearer that 6.5% is a soft, not a hard, target. A rapid decline to the target could and should lead to a quicker ending of the policy. Phil Orlando, Federated Investors: The Fed should make clear that its inflation and unemployment targets are more directly tied to their fed funds target rate decision, rather than their "QE to Infinity" asset-purchase decision, which appears to be more qualitative in nature. James Paulsen, Wells Capital Management : I think the Fed builds unrealistic expectations publicly basing its future policies on a specific variable and thereby exposes the economy and the financial markets to an abrupt and unexpected shift in policy when economic conditions warrant a response even though "specific preordained variables" have not yet reached critical levels. The Fed would be better served by sticking to more generalized commentary as to how their policies are being guided, e.g.

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FED SURVEY
April 30, 2013
inflation pressures, speed of growth and degree of resource slack or output gap and not be more specific than that. Chris Rupkey, Bank of Tokyo-Mitsubishi: Clear when it should not be. This is art, not science. John Ryding, RDQ Economics: The Fed is ambiguous in (i) describing the 6 1/2% unemployment rate and the 2 1/2% inflation rate as thresholds rather than triggers and the description of 'balanced' response. Also, unemployment is an actual variable but inflation is a forecast over 1-2 years. In addition, the Fed has also said it will look at a range of labor market indicators. What happens if unemployment falls to 6 1/4% because of falling labor market participation? Will the Fed look at U-6? The employment-population ratio? Ellen Zentner, Nomura: The challenge at this point is twofold. The views of FOMC participants appear very diverse. That is evident in the discussion of prospects for LSPAs. In addition, what constitutes the "outlook for the labor market" is relatively complex. This makes it difficult for the committee to send a clear signal about the most immediate issue, i.e., the likely course of the current LSPA program.

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FED SURVEY
April 30, 2013 8. Do you believe further quantitative easing can help lower the unemployment rate?
Yes
80%

No

Don't know/unsure

70%

69%
65% 59%

60%

59%

58%

50%

40%

36%

37% 34% 28% 21%

30%

20%

10%

5%

8% 4%

10% 7%

0% Sept 12, 2012 Dec 11 Jan 29, 2013 Survey Dates March 19 April 30

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FED SURVEY
April 30, 2013 Do you believe further quantitative easing can help mortgage rates?
Yes
80%

No

Don't know/unsure

70%

60%

59%

54%
50%

48% 42%

46% 44%

40%

44% 33%

30%

20%

10%

9% 4%

11% 8%

0% Dec 11, 2012 Jan 29, 2013 March 19 April 30 Survey Dates

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FED SURVEY
April 30, 2013 Do you believe further quantitative easing can help lower bond yields?
Yes
80%

No

Don't know/unsure

70%

60%

58%
50%

47% 47%

48%

54%

40%

44% 35%

30%

30%
20%

13%
10%

11% 6% 8%

0% December 11, 2012 January 29, 2013 March 19 April 30 Survey Dates

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FED SURVEY
April 30, 2013 Do you believe further quantitative easing can help increase stock prices?
Yes
90%

No

Don't know/unsure

80%

83% 75% 69%

70%

60%

50%

40%

30%

20%
20%

17% 9%

10%

10%
0% January 29, 2013

8%
March 19 Survey Dates

9%
April 30

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FED SURVEY
April 30, 2013 9. Since September 2012, market functioning in the government bond market has:
March 19
0% 10% 20%

April 30
30% 40% 50% 60% 70%

Improved a lot

0%

0%
19% 11% 60% 65% 15%

Improved somewhat

Stayed the same

Worsened somewhat

15%
2% 2% 4% 7%

Worsened a lot

Don't know/unsure

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FED SURVEY
April 30, 2013 Since September 2012, market liquidity in the government bond market has:
March 19
0% 10% 20%

April 30
30% 40% 50% 60%

Improved a lot

0%

4%
29% 17% 48% 52% 15%

Improved somewhat

Stayed the same

Worsened somewhat

17%
4% 2% 4% 7%

Worsened a lot

Don't know/unsure

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FED SURVEY
April 30, 2013 10. Since September 2012, market functioning in the mortgagebacked security market market has:
March 19
0% 5% 10% 15%

April 30
20% 25% 30% 35% 40% 45%

Improved a lot

4%

2%
31% 22% 29% 39% 20%

Improved somewhat

Stayed the same

Worsened somewhat

20%
2% 4% 14% 13%

Worsened a lot

Don't know/unsure

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FED SURVEY
April 30, 2013 Since September 2012, market liquidity in the mortgagebacked security market market has:
March 19
0% 5% 10% 15%

April 30
20% 25% 30% 35% 40% 45%

Improved a lot

4%

2%
21% 28% 40% 28% 19%

Improved somewhat

Stayed the same

Worsened somewhat

22%
0% 7% 15% 13%

Worsened a lot

Don't know/unsure

CNBC Fed Survey April 30, 2013


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FED SURVEY
April 30, 2013 11. When it comes to the debate over the U.S. debt ceiling, Congress will:
January 29
100%

March 19

April 30

92%
90%

86%

89%

80%

70%

60%

50%

40%

30%

20%

10%

8% 4% 4%

6%

4%

7%

0% Increase the debt ceiling every time it is reached this year Refuse at some point this year to raise it Don't know/unsure

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FED SURVEY
April 30, 2013 12. When it comes to the Sequester, Congress should:
March 19
40%

April 30

35%

35% 33%33%

30%

25%

25% 20% 17%

21%

20%

15%

10%

9% 4% 4%

5%

0% Continue with the current spending cuts Continue with the current level of the spending cuts, but change the makeup Reduce the amount of spending cuts Increase the amount of spending cuts Don't know/unsure

Comments on changing the makeup of spending cuts:


Replace the sequester with a Bowles-Simpson-type formula for reducing government spending over an extended period of time. The sequester = political dysfunction = activist Fed Give president discretion to target cuts. Carefully target where the cuts are to be made. If you think that mindless cutting of the budget is good, this is your policy.

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FED SURVEY
April 30, 2013
Congress and the White House are seemingly incapable of negotiating a more effective spending cut strategy than sequestration, so sequestration has become "a good thing." You don't seem to understand what is happening here. Congress DIDN'T "INCREASE" the debt ceiling in January. It SUSPENDED it. Huge difference. Every stakeholder has a different belief in what should be cut, so choosing specific cuts is a process that would be mired in debate. Across the board cuts, while less than ideal for all involved, are the only evident way to short-circuit that debate. We need to have a 10-year plan to dramatically reduce deficit spending. The sequester was way too small of an amount. We need to get serious. Fix entitlements, instead of the sequester related to defense and non-defense discretionary spending. Provide more flexibility regarding how the sequester is implemented. The makeup of Congress is what needs changing; the budget process should emphasize what is best for the entire country, not to place blame in a highly partisan manner. The government could easily allow the FAA to more efficiently allocate the cuts with FAR less disruption to travel. The U.S. runs a risk of over tightening fiscal policy. This mornings report on GDP highlights this aspect. Overall, real GDP was up 2.5%...but real GDP excluding government (private GDP) rose 4%! In the last two quarters, real private investment and consumption have risen at 3.7% and 3.3% annual rates respectively while overall real GDP has only risen 0.4% and 2.5%. The main thing holding back U.S. growth is the "Government!" Moreover, the emergency to balance government is no longer an emergency. The deficit to GDP ratio was about 10.5% in 2009 and is now close to 6%. The deficit as a percentage of GDP has been declining by more than 1% a year in this recovery all on its own due to the invisible hand of Adam Smith. At this rate, within 12 to 24 months the deficit as a percentage of GDP will fall below 5% at which point it may well be less than the rate of nominal GDP, implying that the debt/GDP ratio (which everyone is so worried about) will peak and begin to decline all on its own. The government should stand down and allow the invisible hand to continue dealing with the deficit. One of the biggest risks to the economy right now is that government cutbacks become too extreme and cause the economy to stall. Let's stop the public cuts and allow the economy to grow at the speed that "private activity" is growing, which is about 3.5% to 4%. Someone has to explain to them very slowly that they are just slowing growth and increasing unemployment. Prioritize the cuts within each agency rather than implement across-the-board same percentage cuts. Congress should provide flexibility to the administration on the makeup. More targeted cuts including tax expenditures; shift more to out-years when the economy is healthier. The administration messed up badly with the FAA by creating an unnecessary problem with flight delays to show that the sequester hurts. The House and Senate took almost instant action to slap down the administration and give the FAA flexibility to not cut controllers. So keep the sequester but give departments flexibility to make cuts. THEN TACKLE ENTITLEMENTS! Give agencies more flexibility to reallocate cuts within departments. Some prioritizing is needed.

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FED SURVEY
April 30, 2013 13. What impact, if any, do you believe recent revenue increases/the Sequester will have on U.S. GDP this year?
January 29
Revenue Increases 0.0%

March 19

April 30
The Sequester

-0.32%
-0.5%

-0.28% -0.40%

-0.20%

-0.61%

-1.0%

-1.5%

-2.0%

Note: We did not ask about the Sequester in the January 29 survey.

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FED SURVEY
April 30, 2013 14. When it comes to the budget deficit, the United States:
January 29
90%

March 19

April 30

80%

80%

70%

67%

60%

52%
50%

40%

39%

30%

25% 16% 9% 4% 4% 0% 4% 0%

20%

10%

0%

Should urgently Has at least a Does not need to Don't know/unsure enact a plan that couple of years enact a plan that puts it on a path before it must enact puts it on a path toward a such a plan toward a sustainable budget sustainable budget deficit deficit

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FED SURVEY
April 30, 2013 15. When it comes to Europe, do you believe the lack of a current crisis mentality is:
January 29
70%

March 19

April 30

62%
60%

64% 64%

50%

40%

36%
30% 29%

30%

20%

10%

8%

8% 0%

0% A sign of real progress Only temporary

Don't know/unsure

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FED SURVEY
April 30, 2013 16. The recent decline in the price of gold is mostly the result of:
40%

35.6%
35%

30%

25%

24.4%

20%

15.6%
15%

15.6%

10%

8.9%

5%

0% Lower inflation expectations Less concern about global risk Popping of a price bubble Other Don't know/unsure

Other responses: Slower global economic growth Many things Lower inflation and global economic expectations Latest chapter in secular commodity decline that began in 2011 Possible Cyprus selling Technical factors Lower inflation/lower risk Combination of all above Strong dollar and rumor regarding Cyprus liquidation Fear of central bank sales Momentum trading Cyprus' gold sales may have been a preview of what other, larger, central banks may do BOJ policy Freak of nature sell-off Concerns over a movement toward large active sellers Large European Central Bank forced sale

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FED SURVEY
April 30, 2013 17. Twelve months from now the price of gold will be:
35%

33%

33%

30%

25%

22%
20%

15%

10%

9%

5%

2%
0% Much lower Lower About the same Higher

0%
Much higher Don't know/unsure

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FED SURVEY
April 30, 2013 18. Which one of two of the following do you think are the best investments right now? (Respondents could chose up to two choices.)
0% Stocks 10% 20% 30% 40% 50% 60% 70% 80%

73%
62% 4% 4% 7% 7% 13% 4%

Real estate

Gold

U.S. Treasury bonds Savings accounts and other cash instruments Corporate bonds

Other

Don't know/unsure

Other responses: Non-agency mortgage backed securities Commodities all except gold Long Nikkei, short yen EM local debt Industrial commodities Developing economy equities

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FED SURVEY
April 30, 2013 19. Where do you expect the S&P 500 stock index will be on ?
June 30, 2013
1,650

December 31, 2013

1612
1,600

1589
1577 1539

1,550

1547

1,500

1497
1,450

1505 1480

1451

1,400

1,350 July 31 2012 Sept 12 Dec 11 Jan 29 2013 March 19 April 30 Survey Dates

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FED SURVEY
April 30, 2013 20. What do you expect the yield on the 10-year Treasury note will be on ?
June 30, 2013
3.0%

December 31, 2013

2.5%

2.31%

2.35% 2.10%

2.0%

1.98%

2.06% 1.90%

2.09%

2.09% 1.83%

1.5%

1.0%

0.5%

0.0%
July 31 2012 Sept 12 Dec 11 Jan 29 2013 March 19 April 30 Survey Dates

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FED SURVEY
April 30, 2013 21. What is your forecast for the year-over-year percentage change in real U.S. GDP for ?
2013
3.0%

2014

+2.7%
2.5%

+2.6% +2.6% +2.6% +2.6% +2.3% +2.2% +1.9%

+2.6%

2.0%

+2.1% +2.1% +2.1%

1.5%

1.0%

0.5%

0.0% January 23, 2012 March 16 April 24 July 31 Sept 12 Dec 11 Jan 29, Mar 19 April 30 2013

Survey Dates

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FED SURVEY
April 30, 2013 22. When do you think the FOMC will first increase the fed funds rate and when will it make its first planned decrease in the size of its balance sheet?
Increase fed funds rate Decrease balance sheet (Average response)

Survey Date December 11, 2012 2013 Q2 Q3 Q4 2014 Q1 Q2 Q3 Q4 2015 Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4


2017 or later
2015 Q1 2014 Q4 2015 Q1 2015 Q1 2015 Q1 2015 Q2 2015 Q2 2014 Q4

January 29, 2013

March 19, 2013

April 30, 2013

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FED SURVEY
April 30, 2013 24. Where do you expect the fed funds target rate will be on ?
June 30 2013 Dec 31 2013

0.5% 0.42% 0.4% 0.41%

0.4%

0.33%

0.3% 0.27% 0.27%

0.3%
0.21% 0.2% 0.19% 0.19% 0.20% 0.17%

0.2% 0.14% 0.1%

0.16%

0.16%
0.14%

0.16%

0.1%

0.0% Jan 23 Mar 16 Apr 24 Jul 31 Sep 12 Dec 11 Jan 29 Mar 19 Apr 30 2012 2013 Survey Dates

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FED SURVEY
April 30, 2013 25. 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)
40%

35%

36.1% 34.0%

30%

28.5% 25.5% 25.9% 26.0% 20.6%

25%

20%

20.3%
19.1%

20.4%

18.2% 17.6%

15%

10%

5%

0% Aug Sep 11, 19 2011 Oct 31 Jan Mar 23, 16 2012 Apr 24 Jul 31 Sep 12 Dec 11 Jan Mar 29, 19 2013 Apr 30

Survey Dates

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FED SURVEY
April 30, 2013 26. What is the single biggest threat facing the U.S. economic recovery?
January 29 March 19 April 30 0% 5% 10% 15% 20% 25% European recession/financial crisis Tax/regulatory policies Slow job growth High gasoline prices Overall inflation Deflation Debt ceiling Too little budget deficit reduction Too much budget deficit reduction Other Don't know/unsure 0% 2% 0% 0% 0% 2% 2% 4% 0% 0% 2% 2% 2% 0% 2% 6% 2% 6% 9% 10% 16% 12% 20% 20% 10% 10% 30% 35% 40% 45%

20% 29% 31% 42%

12% 16% 11%

Other responses:
Sharper global economic slowdown Washington Not enough FUTURE deficit reduction...then jobs Geopolitical risk Fiscal policy in general

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FED SURVEY
April 30, 2013 27. What is your primary area of interest?

Other 17% Currencies 2% Fixed Income 15% Economics 41%

Equities 24%

Comments:
Robert Brusca, Fact and Opinion Economics: The SNAFU over the air traffic controllers tells it all. The president, who should be looking out for our best interests, is instead using sequestration where he did not get his way to punish us so we know that sequestration hurts. Congress is at a log jam. We the people have become expendable, pawns in a big-time game of Republican-Democrat politics. Were now like Europe, ruled by an elite with its own agenda. We the people- what a joke...we the peons is more like it. Tony Crescenzi, PIMCO: Is Ben Bernanke skipping Jackson Hole in August to instead go fishing with Steve Liesman? Mark Elenowitz, TriPoint Global Equities: In 2011, I stated that we believed the risk of persistent unemployment and other economic headwinds could lead to yet another round of QE. We were the minority but were right. Today in 2013, not much has changed other than a sequestration that is causing harm, debt ceilings that are broken thru, a standoff among politicians, and continued unemployment. Until all parties focus on a practical solution rather than blame and policies that are not working, this cycle and Fed actions will continue.

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FED SURVEY
April 30, 2013
Hugh Johnson, Hugh Johnson Advisors: Although there are significant risks (Europe, China, U.S. fiscal policy) none will derail the current bull marketeconomic expansion. The most significant risk that we know that faces the U.S. equity markets currently (and it is not a large risk) is valuation. The equity markets remain 3-4% overvalued or above the level they "should" average in the current quarter. Additionally, the returns for equities and fixed income are likely to be subdued between now and end of 2014 (0.2% for fixed; 5.5% for equities total returns). But currently we do not see risks that will derail recovery, although the debt ceiling issue will again be a factor in September! Summer will be quiet. John Kattar, Ardent Asset Advisors: The economy is struggling. The data have been weak, and continued growth in free reserves is indicative of risk aversion and lack of credit demand. I now believe an extension of QE into 2014 is somewhat more likely than any tapering before year end. Barry Knapp, Barclays PLC: The portfolio balance effect has been effective in raising stock prices but primarily those with bond-like characteristics. For 1Q13 the best performing sectors were the 4 defensives. While this doesn't necessarily alter the wealth effect it does imply that the policy transmission channel of stock prices boosting business investment won't work as well as would be the case if share prices were rising due to improving fundamentals. David Kotok, Cumberland Advisors: Washington policy restrains U.S. growth. Fix Washington and the U.S. economy will soar. Alan Kral, Trevor Stewart Burton & Jacobsen: Monetary policy has lost its effectiveness. Subodh Kumar, Subodh Kumar & Associates: Edict by policymakers like the government or the Fed cannot establish value in capital markets but do risk distorting them. Investors need to focus on quality of execution by companies (and governments). William Larkin, Cabot Money Management: As investors we need to keep in mind that recoveries can often come unexpectedly. Guy LeBas, Janney Montgomery Scott: With commodities prices falling, there's been greater discussion of disinflation of late. Fed asset purchases can still be effective in stemming corrosive disinflation, but their ability to stimulate economic growth is nearing its end. CNBC Fed Survey April 30, 2013
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FED SURVEY
April 30, 2013
Rob Morgan, Fulcrum Securities: The use of economic targets by the Fed is not wise because if the committee raises rates because a target has been reached, they are already behind the inflation eight-ball. Chad Morganlander, Stifel Nicolaus (Washington Crossing Advisors): Unfortunately, the economy has not reached the point of a self-sustained recovery. The Federal Reserve will continue easing well beyond street expectations. Its paramount that we make a transition from a liquidity-induced rally to an environment with above-trend economic growth. Joel Naroff, Naroff Economic Advisors: The Fed, by deed if not by word, is making it clear that a little extra inflation is not a bad thing. Chris Rupkey, Bank of Tokyo-Mitsubishi: If the Fed keeps rates down at zero until 2016, there won't be a fixed income market for you to report on, or at least the number of sales and trading staff needed Street-wide will be cut in half. Hank Smith, Haverford Investments: The key for a successful Fed exit lies with better pro-growth fiscal policy. That won't happen with this administration. Mark Vitner, Wells Fargo: We see the continued recovery in home sales and residential construction offsetting the drag from higher taxes, reduced government spending, and the global economic slowdown. Scott Wren, Wells Fargo Advisors: 1Q earnings results have little to do with the continuation of the rally we have seen. Reasonable valuations, the Fed's easy money policies, and the fact that the economy continues to move ahead are the biggest factors. The market is comfortable with this modest growth/modest inflation environment. It also helps in the near term that "everyone" is waiting for a pullback and some investors are starting to jump into the market, worried they will miss more upside. Mark Zandi, Moody's Analytics: The next few months will be uncomfortable as economic growth slows in the face of intensifying fiscal headwinds. But the economy will grow strongly next year as the fiscal headwinds fade and the strength of the private economy is able to shine through.

CNBC Fed Survey April 30, 2013


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