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FED SURVEY

June 12, 2018
These survey results represent the opinions of 38 of the nation’s top money managers,
investment strategists, and professional economists.

They responded to CNBC’s invitation to participate in our online survey. Their responses were
collected on June 7-9, 2018. 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. At its June meeting, the Federal Reserve will:

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

Raise interest
rates 100%

Lower interest
rates 0%

Keep rates
unchanged 0%

Don't know/
unsure 0%

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2. After its upcoming meeting, the Federal Reserve's next
directional move will most likely be:
Raise interest rates Lower interest rates
Move to negative interest rates Launch new quantitative easing

100%
100%
100% 100% 100%
98% 98% 97%
95% 95%
94% Raise interest rates: 97%
92%
90%
88%

80%

60%

40%

20% Lower interest rates: 0%

Launch new quantitative easing: 3%
10% 10%

4% 5% 5%
3% 2% 2% 2% 2% 3%
0% 0%
0%
Jan Mar Apr Jun Jul Aug Sep Nov Dec Jan Mar May Jun Jul Sep Oct Dec Jan Mar May Jun
27 '16 15 26 14 26 24 20 1 13 31 '17 14 2 13 25 19 31 12 30 '18 20 1 12

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(For the 97% answering the next move will be to raise rates)

When will the Federal Reserve take this action?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Jul 3%

Aug 0%

Sep 81%

Oct 3%
Average:
Nov 0%
September
2018
Dec 11%

Jan '19 0%

Feb 0%

Mar 3%

Apr 0%

After
Apr '19 0%

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3. How many times in total will the Federal Reserve hike
rates (assuming 25-basis point increases) in …?

2018 hikes 2019 hikes

4.00

3.50

3.45 3.46 3.49

3.21
3.00

2.86 2.84
Average

2.50 2.63 2.63
2.48 2.49
2.39
2.26
2.00

1.50

1.00
Sep 19 Oct 31 Dec 12 Jan 30 Mar 20 May 1 Jun 12
Survey Dates

Note: Three percent of respondents said the Fed will cut rates in 2019.

CNBC Fed Survey – June 12, 2018
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FED SURVEY
June 12, 2018

4. Do you generally approve or disapprove of the job
President Trump is doing handling the economy?

Mar 20 May 1 Jun 12
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

13%
Strongly
approve 8%
14%

45%
Approve 49%
41%

20%
Neutral 19%
24%

18%
Disapprove 16%
11%

5%
Strongly
disapprove 8%
11%

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5. How would you view a U.S. exit from the North American
Free Trade Agreement?

Mar 20 May 1 Jun 12

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

48%
Very
49%
negative
27%

33%
Negative 41%
57%

15%
Neutral 5%
8%

3%
Positive 0%
5%

0%
Very
0%
positive
0%

Don't 3%
know/ 5%
unsure 3%

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6. In general, how do you view the Trump administration's
trade policies?

Positive Negative Neutral Too soon
for U.S. for U.S. for U.S. to tell
economic economic economic the impact
growth growth growth on U.S.
economic
growth
100%

90%

80%

70%
Negative for growth
63%
60%
58%
60%
55%
50%

40%

31% Too soon to tell
30%
23% 27%

20% 21%
16% 13% Neutral for growth

10%
8%
8% 8%
3% 3% 5%
0% Positive for growth
Jan 30 Mar 20 May 1 Jun 12

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7. How will recent tariffs announced by the Trump
administration, along with threatened and actual
retaliation by those affected countries, affect:

U.S. Economic Growth U.S. jobs growth
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

3%
Increase
5%

62%
Decrease
49%

Little or
35%
no effect
46%

Don't 0%
know/
unsure 0%

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8. The recent rise in oil prices will:

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

Reduce U.S.
economic growth 22%

Increase U.S.
economic growth 11%

Have no
effect on
U.S. economic 64%
growth

Don't know/
unsure 3%

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9. When will the European Central Bank stop its
quantitative easing program??

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

Sep 2018 12%

Oct 9%

Nov 3%

Dec 44%
Average:
Jan 2019 6%
December
Feb 3% 2018

Mar 12%

Apr 0%

May 0%

Jun 0%

After
Jun 2019 12%

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10. What is your forecast for overall growth in Europe in
the next year?

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

Strongly
above trend 0%

Modestly
above trend 34%

At trend 31%

Modestly
below trend 26%

Strongly
below trend 3%

Don't know/
unsure 6%

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11. What is the chance Italy leaves the eurozone in the
next three years?

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

0% 14%

10% 24%
Average:

20% 27% 18.6%

30% 22%

40% 8%

50% 0%

60% 0%

70% 0%

80% 0%

90% 0%

100% 0%

Don't know/
unsure
5%

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

December 31, 2018 December 31, 2019

3,200

3005
3,000
2946
2928
2879
2937
2862

2,800 2839 2848

2775 2787

2708

2,600

2588 2593
2555 2564 2562

2480
2,400 2453

2,200

2,000

1,800
Dec Jan Mar May Jun Jul Sep Oct Dec Jan Mar May Jun
13 31 14 2 13 25 19 31 12 30 20 1 12
2017 2018
Survey Dates

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13. What do you expect the yield on the 10-year
Treasury note will be on … ?

December 31, 2018 December 31, 2019

4.0%

3.54% 3.54% 3.51%

3.5% 3.44% 3.43% 3.44%
3.37%

3.24% 3.24%
3.22% 3.23%
3.17%
3.05%
3.03% 3.06% 3.07%
2.95%
3.0%

2.84%

2.5%

2.0%

1.5%

1.0%
Dec Jan Mar May Jun Jul Sep Oct Dec Jan Mar May Jun
13 31 14 2 13 25 19 31 12 30 20 1 12
2017 2018
Survey Dates

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14. Where do you expect the fed funds target rate will
be on … ?
Dec 31, 2018 Dec 31, 2019 Dec 31, 2020
2.98%
3.1%

2.87%
2.86%
2.90%
2.9%
2.95%

2.73% 2.85%

2.70% 2.70% 2.87%
2.67% 2.68%
2.7% 2.80%
2.60% 2.67%

2.56%
2.49%
2.5% 2.54%

2.42% 2.32%
2.29%
2.3% 2.25% 2.24%

2.22% 2.19%
2.17%
2.15% 2.14% 2.23%

2.1% 2.10% 2.03%

2.07% 2.06%
2.06%
2.02%
1.87%
1.9%
1.81%

1.78%
1.7%
1.69%

1.5%
Apr Jun Jul Aug Sep Nov Dec Jan Mar May Jun Jul Sep Oct Dec Jan Mar May Jun
26 14 26 24 20 1 13 31 14 2 13 25 19 31 12 30 20 1 12
2017 2018

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15. At what fed funds level will the Federal Reserve stop
hiking rates in the current cycle? That is, what will be the
terminal rate?
4.0%

3.5%

3.29%
3.30%
3.24%
3.20% 3.21%
3.17%
3.11% 3.18%
3.06%
3.16%
2.98% 2.95%
3.0% 3.04% 2.94%
2.92%
2.85% 2.94%
2.91%
2.85% 2.73%
2.79% 2.80%
2.65%
2.69%
2.65% 2.64% 2.66%
2.58% 2.48%
2.5% 2.56%

2.42% 2.44%

2.29%

2.0%
Sep 16
Oct 28

Sept 16
Oct 27

Sep 20
Jan 26 '16

Sep 19
Jan 27, '15
Mar 17

Jun 16

Mar 15

Jun 14

Jan 31 '17

Oct 31
Jul 28

Jul 26

Mar 14

Jun 13

Jan 30 '18
Aug 20

Jul 25

Mar 20

Jun 12
Apr 28

Aug 25

Apr 26

Aug 24
Dec 16

Dec 15

Dec 13
Nov 1

May 2

Dec 12

May 1

Survey Dates

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16. Will the Fed raise rates above its neutral rate to slow
the U.S. economy?

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

Yes 62%

No 32%

Don't
know/ 5%
unsure

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17. When do you believe fed funds will reach its
terminal rate?

2017 2018 2019
Survey date
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Aug 20, 2014 Q4
Sept 16 Q3
Oct 28 Q4
Dec 16 Q1
Jan 27, 2015 Q1
Mar 17 Q4
Apr 28 Q1
June 16 Q1
July 28 Q2
Aug 25 Q3
Sept 16 Q1
Oct 27 Q3
Dec 15 Q1
Jan 26, 2016 Q2
Mar 15 Q3
Apr 26 Q4
Jun 14 Q4
Jul 26 Q4
Aug 24 Q4
Sept 20 Q4
Nov 1 Q1
Dec 13 Q2
Jan 31, 2017 Q2
Mar 14 Q2
May 2 Q2
June 13 Q2
Jul 25 Q2
Sep 19 Q2
Oct 31 Q3
Dec 12 Q3
Jan 30, 2018 Q3
Mar 20 Q3
May 1 Q3
Jun 12 Q4

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18. What is your forecast for the year-over-year
percentage change in real U.S. GDP for …?
2018 2019

3.0%
2.94% 2.93%

2.85%
2.85% 2.82%
2.80%
2.8% +2.76%
+2.75%
2.76%

2.72%
2.61% 2.70%
+2.62% 2.66%
2.6% 2.60%

+2.58%

2.4% +2.45% 2.45%

2.2%

2.0%

1.8%
Jan 31 Jan 30
Dec 13 Mar 14 May 2 Jun 13 Jul 25 Sep 19 Oct 31 Dec 12 Mar 20 May 1 Jun 12
'17 '18
2018 +2.76% +2.75% +2.62% +2.58% +2.45% 2.45% 2.60% 2.61% 2.85% 2.94% 2.76% 2.82% 2.93%
2019 2.85% 2.70% 2.72% 2.66% 2.80%

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19. What is your forecast for the year-over-year
percentage change in the headline U.S. CPI for …?
2018 2019

2.8%

2.64%

2.6% 2.57%
2.54%
2.50%
2.48%
2.44% 2.45%
2.41%
2.4% 2.45%
2.38%
2.40%

2.28% 2.32% 2.32%
2.30%
2.2%
2.23%

2.15% 2.14%

2.0%

1.8%

1.6%
Dec Jan Mar May Jun Jul Sep Oct Dec Jan Mar May Jun
13 31 14 2 13 25 19 31 12 30 20 1 12
2017 2018
Survey Dates

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20. What do you expect the U.S. unemployment rate will
be for:

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

2018 3.74%

2019 3.64%

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21. Given the strength in the job market, why haven't
wages increased more strongly? (Respondents could
choose up to two responses.)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Lower-paid young workers
replacing older workers 49%

Lack of productivity 38%

Global labor competition 24%

Still a large pool of available workers 24%

Inability of companies to raise prices 16%

Other 8%

Lack of unions 5%

Don't know/unsure 0%

Other responses:
• Technology
• Slow nominal GDP growth (effective • Large pool of workers part time for
Fed restraint) economic reasons

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22. What is the single biggest threat facing the U.S.
economic recovery? (Percentage points)

Outcome of US presidential election
European recession/financial crisis

Terrorist attacks in the U.S.

Protectionist trade policies

Overvaluation of equities
Tax/regulatory policies

Trump's temperament
Global econ weakness
Rise in interest rates

Don't know/unsure
Immigration policy

Fed policy mistake
Slow wage growth
Geopolitical risks

Worker shortage
Slow job growth

Debt ceiling
Deflation
Inflation

Deficits

Other
Survey Date
Apr 30 2 3 2 1
‘13 0 1 0 0 2 2 1 0
1 2 2 1
Jun 18 5 8 0 3 3 0 3 0
3 2 1 1
Jul 30 8 0 2 0 2 2 0 4 4
2 2 1
Sep 17 4 7 2 2 0 4 8 7 2
2 2 1
Oct 29 8 9 4 3 3 3 8 3 0
3 2 1
Dec 17 5 2 9 2 0 2 5 2 2
Jan 28 2 3 1 2
'14 7 1 0 2 0 0 2 1 0
1 2 2 1
Mar 18 0 3 6 3 5 0 5 8 0
2 2 1 1
Apr 28 3 6 1 3 5 0 8 8 3 0
1 2 1 1 1 1
Jul 29 2 9 2 6 3 0 2 2 2 3
2 2 1 1
Sep 16 6 6 9 6 3 0 6 1 1 3
3 1 1 1
Oct 28 1 8 5 3 3 0 0 8 8 3
4 1 1 1
Dec 16 0 4 4 3 6 0 3 4 3 0

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Outcome of US presidential election
European recession/financial crisis

Terrorist attacks in the U.S.

Protectionist trade policies

Overvaluation of equities
Tax/regulatory policies

Trump's temperament
Global econ weakness
Rise in interest rates

Don't know/unsure
Immigration policy

Fed policy mistake
Slow wage growth
Geopolitical risks

Worker shortage
Slow job growth

Debt ceiling
Deflation
Inflation

Deficits

Other
Survey Date
Jan 27 1 1 4 1
'15 0 3 9 0 0 0 6 6 1 6 6 0
1 2 1 1
Mar 17 6 4 0 3 6 0 6 8 8 7 4 0
1 1 2 1
April 28 3 1 8 3 0 0 6 1 8 8 9 3
1 1 2 2 1
Jun 16 3 7 3 0 0 0 4 5 2 6 1 0
2 1 2
Jul 28 6 1 9 0 0 0 2 6 9 9 9 0
1 4 1
Sept 16 0 6 2 0 4 0 0 8 5 8 4 2
1 4 1
Oct 27 0 8 5 3 8 0 8 3 1 0 5 0
1 1 4 1
Dec 15 0 0 5 0 0 0 8 0 4 5 3 5 0
Jan 26 1 4 2
'16 0 0 5 0 3 0 0 5 4 8 0 3 3
2 3 2
Mar 15 5 1 3 0 0 0 5 5 3 5 0 3 1 0
2 3 1
Apr 26 0 2 2 2 2 0 0 7 6 9 0 7 1 2
2 2 1 1
Jun 14 0 8 5 3 0 0 3 0 8 8 0 5 3 0 0
2 1 2
Jul 26 2 0 7 2 2 0 2 0 2 7 0 7 7 7 2
1 3 1 1
Aug 24 3 9 3 3 0 0 3 3 1 3 3 6 4 1 0
1 1 3 1
Sep 20 0 6 1 3 0 0 0 3 0 8 5 5 8 1 0

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June 12, 2018

Outcome of US presidential election
European recession/financial crisis

Terrorist attacks in the U.S.

Protectionist trade policies

Overvaluation of equities
Tax/regulatory policies

Trump's temperament
Global econ weakness
Rise in interest rates

Don't know/unsure
Immigration policy

Fed policy mistake
Slow wage growth
Geopolitical risks

Worker shortage
Slow job growth

Debt ceiling
Deflation
Inflation

Deficits

Other
Survey Date
2 3
Nov 1 3 7 8 0 3 0 8 3 2 3 0 0 5 8 0
1 2
Dec 13 5 9 2 7 0 0 7 7 9 0 2 7 8 5 2
Jan 31 1 1 5 1
'17 0 5 3 3 0 0 0 3 0 5 0 0 0 1 0 0 0
4 1
Mar 14 0 7 2 2 0 0 0 7 4 7 0 2 4 7 4 3 0
2 2 1
May 2 0 8 3 3 0 0 0 5 4 5 0 0 5 6 8 3 0
2 1 1
Jun 13 0 5 5 5 0 3 0 3 1 8 5 0 0 6 8 8 3 0
1 1 2 1
Jul 25 0 5 5 3 3 0 0 0 3 8 5 0 0 0 5 8 8 0
1 1 3
Sep 19 0 2 2 0 2 0 5 2 7 0 7 2 0 2 2 7 7 0
2 1 1 1
Oct 31 0 7 2 2 0 0 0 5 3 5 0 0 2 9 2 4 9 0
1 1 1 1 1
Dec 12 0 7 5 2 0 0 0 7 2 0 2 0 2 2 7 5 5 2 0
Jan 30 2 1 1
‘18 0 3 3 8 0 0 0 8 8 0 0 0 3 4 5 3 8 8 0
4 1
Mar 20 0 3 3 8 0 0 0 8 0 3 3 0 0 7 3 0 8 6 0
2 2 1 1
May 1 0 0 3 8 0 0 3 2 5 8 0 0 0 3 5 3 1 1 0
1 3 1
June 12 3 0 3 1 0 0 0 3 5 5 3 0 0 5 3 0 8 8 4 0

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Other responses:
• Debt and unfunded liabilities • Someone doing something really
• Foreign actions stupid because they miscalculate
• Global economic weakness and another party's response
central bank misstep • Supply constraints in residential
construction

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June 12, 2018

23. 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%

36.1%

This survey:
35%
34.0% 13.8%

30%
28.5% 28.8%

26.0%
25.9% 25.3%
25.5%
25% 24.4%
23.5%
22.9%24.1% 23.2%

22.1%
22.2%
20.6% 21.6%
20.4% 21.1% 19.3%
20% 20.3% 18.9%
18.8%
18.2% 18.4% 18.5%
17.3% 18.6%
19.1% 18.1%
16.9% 16.9%
17.6% 16.2% 16.4% 17.4% 16.5%
16.7%
15.1% 16.4%
16.2%
15% 15.1%
15.3% 15.0% 14.9%
15.2% 15.2%
14.6% 14.7%
13.6%
13.7% 13.8%
13.0%

14.3%

10%

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June 12, 2018

24. What is your primary area of interest?

Other
22%

Currencies
0%
Economics
Fixed Income
50%
14%

Equities
14%

Comments:

John Augustine, Chief Investment Officer, Huntington Bank:
In the near term, the governor on the speed of the U.S. economy is
likely to be labor.

Jim Bianco, President, Bianco Research: I fear the oldest story
in finance. The Fed hikes too much and inverts the yield curve in
2019. That signals interest rates are too high and impairs the
economy in 2020.

Peter Boockvar, Chief Investment Officer, Bleakley Advisory
Group: The U.S. economy is clearly now running hot with supply
constraints rampant, predominantly with transportation and labor.
Higher inflation as a result is going to put real pressure on the Fed.

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Kathy Bostjancic, Head of U.S. Macro Investor Services,
Oxford Economics USA: The Fed continues to face a difficult
challenge as it tries to calibrate interest rates over the coming
quarters. The U.S. economy is late-cycle and being stimulated by
large fiscal stimulus that will, over the next few years, push it close
to full capacity utilization.

John Donaldson, Director of Fixed Income, Haverford Trust
Co.: The bond market will be very attentive listening to Chairman
Powell's press conference, particularly concerning his view on the
timing of future hikes.

Neil Dutta, Head of Economic Research, Renaissance Macro
Research: The Fed is slowly approaching the low end of neutral rate
estimates. With core inflation still below two percent, perhaps they
should have second thoughts at shifting rates above neutral late next
year.

Mike Englund, Chief Economist, Action Economics, LLC: The
Fed will be comfortable tightening until they've achieved a
reasonable level of neutrality, with a 2-handle on the fed funds rate
and a moderate pace of QE unwind. The Fed will likely be hesitant to
push past that without clear evidence of inflation.

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Robert Fry, Chief Economist, Robert Fry Economics LLC: To
clarify my answer about the biggest threat to recovery: The biggest
threat to strong growth is weakness in residential construction
caused by shortages of labor and, especially, land. Local regulations
make it more difficult and expensive to build, and large national
builders bought many of the available lots during the financial crisis,
turning what was a perfectly competitive industry into more of an
oligopoly. Ironically, while weakness in residential construction is
the biggest threat to the STRENGTH of the expansion, it is a great
contributor to its expected LONGEVITY. It's hard to have a recession
without a big downturn in housing starts, and it's hard to have a
housing bust without first having a housing boom.

Stuart Hoffman, Senior Economic Advisor, PNC Financial: The
depth and breadth of the U.S. economy and job market expansion is
the best in the past twenty years. This should be reducing the
budget deficit but excessive fiscal stimulus is leaving a trail of red ink
in the economy's wake.

Art Hogan, Chief Market Strategist, B. Riley FBR: The market is
correctly more concerned about a trade policy mistake than a
monetary policy. The odds are higher for a misstep on trade, and the
consequences are measurably more daunting.

Constance Hunter, Chief Economist, KPMG: We finally have an
economy that is running "hot," the culmination of a long recovery,
plenty of global liquidity and stimulative fiscal policy. The challenge
will be actually achieving a soft landing given the mounting risks due
to trade tensions and accumulated global debt levels.

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John Kattar, Chief Investment Officer, Ardent Asset
Management: Over the past year, the Fed has more than offset the
drop in securities held with a reduction in the reverse repo account,
resulting in a shrinking balance sheet without tightening liquidity.
The biggest question is whether this monetary sleight of hand will
continue.

Jack Kleinhenz, Chief Economist, National Retail Federation:
The economy is functioning well and its pace is strong. The big
issue for the Fed is assessing the strength of the stimulus on the
economy and building inflation pressure. Clearly, they will be
looking very closely at recalibrating their near-term outlook and
plans for rate increases. Four quarter-point hikes in 2018 will be on
the table.

David Kotok, Chairman and Chief Investment Officer,
Cumberland Advisors: No one wins a trade war. Kudlow knows
this, Mnuchin knows this. Policy is now dangerous.

Subodh Kumar, President, Subodh Kumar & Associates: We
anticipate a rising interface between policy and market volatility.
After initial selloffs ostensibly on the Italian political impasse,
worldwide equity markets moved up sharply and fixed-income yields
stabilized. Political, central bank and capital market developments
likely indicate that the backdrop for the next crisis of risk assessment
may be over sovereign debt paved, even if inadvertently, by excess
quantitative ease. Concurrently, aggressive politics, international
trade and internal fiscal-monetary interactions appear for advanced
and emerging areas alike, not least in the United States with odd
felicitations. We favor strong and conservative balance sheets as
well as quality of product/service delivery, whether in fixed income
or in equities. We have cash above benchmark and precious metals
as alternate asset overweight

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Guy LeBas, Chief Fixed Income Strategist, Janney
Montgomery Scott: While a recession is highly unlikely in 2018,
there are a number of markers signaling the end of this expansion is
approaching. The combination of a spike in long-term yields, a rally
in the dollar, and a big upward move in oil is one such signal--and a
very powerful one that has preceded numerous recessions by about
18 - 24 months over the last half century.

Drew T. Matus, Chief Market Strategist, MetLife Investment
Management: Productivity growth is the key indicator to
determining how long this expansion will last.

Rob Morgan, Chief Investment Officer, Sethi: The May jobs
report showed the unemployment rate to be approaching 1969
levels. What more does the Fed need to ratchet up expected rate
hikes for 2018 from 3 to 4?

Chad Morganlander, Portfolio Manager, Stifel Nicolaus
(Washington Crossing Advisors): Inflation creep will continue to
be a steady thematic. The slow withdrawal of liquidity from central
banks will continue into 2020. This action will reduce return
expectations across all asset classes.

Joel Naroff, President, Naroff Economic Advisors: There are
many reasons to think inflation will accelerate toward 3% and few
that argue it would remain close to 2%, so the Fed will have to hike
rates more than expected.

Lynn Reaser, Chief Economist, Point Loma Nazarene
University: The Fed is likely to sidestep the risks coming from Italy
and a possible trade war as it focuses on signs of stronger U.S.
growth and firming inflation. The result will be a June rate hike as
policymakers continue their drive towards normalization.

CNBC Fed Survey – June 12, 2018
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FED SURVEY
June 12, 2018

Chris Rupkey, Chief Financial Economist, MUFG: Smoot-Hawley
tariffs sunk the economy's ship before the Great Depression, and it
will be a miracle if the U.S. economy can stay afloat with the
protectionist stance the Trump administration has taken. Economists
don't agree on much, but it is hard to find one who thinks tariffs are
pro-growth.

Richard I Sichel, Senior Investment Strategist, The
Philadelphia Trust Company: The stock market is reasonably
priced based on future corporate earnings expectations. The tax cuts
for corporations and individuals have great potential for further
economic growth for many years. Less onerous but rational
government regulation is an ongoing positive. Information
Technology as well as Financials should lead the way.

Allen Sinai, Chief Global Economist and Strategist, Decision
Economics: The best is yet to come in the U.S. and global
economies despite rising interest rates.

Hank Smith, Co-Chief Investment Officer, Haverford Trust
Company: The only thing holding back the stock market is trade
tariffs uncertainty.

Diane Swonk, Chief Economist, Grant Thornton: We face a fiscal
cliff with government spending that could trigger a growth recession
in FY 2020. A full-blown trade war would move it up to early 2019.
The administration's policies are adding uncertainty and undermining
what should be a stronger economy in terms of investing.

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FED SURVEY
June 12, 2018

Scott Wren, Senior Global Equity Strategist, Wells Fargo
Investment Institute: Good (not great) GDP growth and only
slightly higher general inflation should allow the SPX to finish at our
2850 year-end target. The labor market, for now, is in Goldilocks
mode with modest wage gains and plenty of jobs being created. The
new tax code likely will allow this expansion to be extended by a
year or two. The two biggest risks are a Fed policy mistake and
global growth that stalls or slows. Stocks are not cheap but
valuations have a touch more upside. Stick with sectors sensitive to
a continuation of this expansion.

Mark Zandi, Chief Economist, Moody's Analytics: The economy
will overheat during the next 18 months. A 2020 recession is
increasingly likely.

CNBC Fed Survey – June 12, 2018
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