Members of the Securities Industry and Financial Markets Association’s Economic Advisory Roundtable forecast that U.S. economic growth will continue to grow at a steady but unspectacular rate of 3.3 percent in 2010 and 3.1 percent in 2011. The Roundtable panelists were restrained in their forecasts and demurred from predicting the level of rebound one might normally expect after a severe recession. The outlook warned of future challenges, particularly the impact of pending financial regulatory reform and potential missteps in fiscal and monetary policies such as tax policy.

MONETARY POLICY The Roundtable was unanimous in its opinion that the Federal Opn Market Committee (FOMC) would not change its current 0.0 to 0.25 percent target federal funds rate at the upcoming June 22-23 meeting.

INTEREST RATES The median forecast for the June 2010 average 10-year Treasury note yield was 3.4 percent, rising to 3.75 percent in December and 4.1 percent in June 2011.13 Credit market risk aversion, economic growth prospects and inflation/inflationary expectations were cited as the three most important drivers of the Treasury yields outlook; budget deficit trends, FOMC interest rate policy and the dollar were also identified as important, albeit lesser, influences.

Other Questions

• Monetary Policy: Hold or Sell?
• Business and Credit Market Adjustments Dominant in Promoting US Growth
• Fiscal Policy: Mini-Stimulus
• Sunset of Tax Cuts/Tax Increases a Further Drag
• Has Housing Already Reached Bottom?
• Employment Outlook
• Oil Prices
• Financial Regulatory Reform

About the Report

A semiannual survey of SIFMA’s Economic Advisory Roundtable concerning the U.S. economic outlook and rates forecasts.

Credits

SIFMA

• Staff Advisor: Kyle Brandon

SIFMA Economic Advisory Roundtable 2010

• Chair: John Silvia, Wells Fargo