The Economy:

SIFMA’s Economic Advisory Roundtable forecasted that the U.S. economy will grow at a 2.3 percent rate in full-year 2014, rising to 3.0 percent in full-year 2015. The outlook for full-year 2014 is slightly higher than the Roundtable’s previous prediction of 2.2 percent, while the outlook for 2015 has been lowered slightly from 3.1 percent mainly due to concerns over global growth deceleration and monetary policy uncertainty.

Monetary Policy:

The Roundtable continues to expect 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, with half the respondents still expecting the first rate hike in 2Q’15, 44 percent in the second half of 2015 and the balance in 1Q’16. Unlike the wide range of views expressed in the mid-year survey, the current expectation of when the FOMC would begin shrinking the Federal Reserve’s balance sheet by curtailing reinvestment of proceeds from its asset holdings converged on the first quarter of 2016: a third expected reinvestment to end in 4Q’15, a little more than half in 1Q’16 and the balance later in 2016. As predicted in the previous survey, the FOMC wound up its asset purchase program before the end of this year.

Economic Growth

The median end-year forecast called for 2014 gross domestic product (GDP) to grow by 2.3 percent on a year-over-year basis and by 2.2 percent on fourth quarter-to-fourth quarter basis, slightly stronger than predicted in the mid-year survey.

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

Related SIFMA News

• Press Release:  SIFMA Roundtable of Economists Unveil End-Year 2014 Economic Outlook – December 15, 2014
• Pennsylvania + Wall Blog: Expert Insights: The Outlook for the US Economy in 2015 – December 15, 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