The Economy:

SIFMA’s Economic Advisory Roundtable forecasted that the U.S. economy will grow at a 2.2 percent rate in full-year 2014. Geopolitical concerns and monetary policy uncertainty, on top of the negative impact of severe weather in the first quarter, contributed to a lowered outlook for 2014, compared to the Roundtable’s previous prediction of 2.7 percent. A rebound to 3.1 percent GDP growth was forecast for full-year 2015.

Monetary Policy:

Expectations for the Federal Open Market Committee (FOMC) to maintain its current 0.0 to 0.25 percent target federal funds rate range through mid-year 2015 have persisted, with half the respondents now expecting the first rate hike in 2Q’15, 40 percent in the second half of 2015, and the remaining 10 percent in 1Q’16. Opinions diverged significantly on when the FOMC would begin shrinking the Federal Reserve’s balance sheet by curtailing reinvestment of proceeds from its asset holdings. There continues to be near unanimity, however, that the FOMC securities purchases will cease by the end of 2014.

Economic Growth

The median mid-year forecast called for 2014 gross domestic product (GDP) to grow by 2.2 percent on a year-over-year and fourth quarter-to-fourth quarter basis, weaker than predicted in the end-year survey. Survey respondents noted that the unusually harsh winter played a significant role in weak 1Q’14 GDP. All agreed that the weather lowered GDP by at least 50 basis points, with a majority estimating at least a 100 basis point impact and a significant minority of respondents believing the impact to be greater than 200 basis points.

The report also includes forecasts concerning the employment outlook and oil prices, among other issues.

Related Press Release: SIFMA Roundtable of Economists Unveil Mid-Year Economic Outlook – June 17, 2014 

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 2013-2014

• Chair: Diane Swonk, Mesirow Financial