What will President Trump’s economic policies mean to
financial markets in 2017 and beyond? You can now watch a
recent discussion lead by two of our experts. They discussed the topic
recently with a group of financial advisors who serve credit union members.
Our chief economist Steve Rick and Scott Knapp, Managing
Principal for CUNA
Mutual Fiduciary Consultants, presented a general overview of the current
economy and financial markets, and their forecast of key indicators for 2017
and beyond.
Rick outlined the Federal Reserve Bank’s goals for steadily
increasing the short-term interest rates from 0.9 percent today up to 3 percent
in about four years. He said if the Trump Administration can enact its main
stated economic policies, the U.S. economy should grow at a higher than average
rate—above 2 percent—in 2017 and 2018.
However, he forecast a one-year downturn in 2018, as
Americans pay down debt after borrowing heavily for several years. Rick also
cautioned that uncertainty about President Trump’s policies can delay economic
growth if companies respond by delaying hiring and capital expenditures.
Rick also discussed the potential effects of the
administration’s policies on the labor market, inflation, deficits, and
interest rates.
In addition, Knapp explained the substantial stock market
increase following the election, showing how stock prices turned sharply higher
above the rate of corporate earnings growth since November 2016. The burst of
optimism appears to have levelled off in the first quarter of 2017, Knapp said.
The Trump administration’s three key pro-growth policies of
tax cuts, infrastructure spending and reduced regulation face three potential
headwinds, Knapp said. These headwinds include higher deficits and debt,
opposition from Congress to increased spending and legal challenges to
regulatory changes.
Rick and Knapp concluded by answering questions from
financial advisors. A few topics included the merits of actively managed bond
funds versus indexed funds and potential effects of international unrest on
U.S. markets.
Click here
to view the discussion
About the Presenters
Steve Rick is the
CUNA Mutual Group Director – Chief Economist. He’s also a board member for University
of Wisconsin Credit Union, and a senior lecturer at the University of
Wisconsin-Madison.
Scott Knapp is Managing
Principal – Investment Consulting for CUNA
Mutual Fiduciary Consultants. He’s responsible for CUNA Mutual’s overall
investment philosophy and implementation of programs that help institutional
investors meet their objectives. He’s also a lecturer at the University of
Wisconsin-Madison.
DISCLOSURE:
CUNA
Mutual Fiduciary Consultants is a marketing name and service of MEMBERS Capital
Advisors, Inc., 5910
Mineral Point Road, Madison, WI 53705, the registered investment advisor affiliate
of CUNA Mutual
Group. MEMBERS Capital Advisors has assets under management of more than $15.2
billion*, including
the general account of CMFG Life Insurance Company.
Visit www.cunamutual.com/CMFC for more information.
*As of June
30, 2016. 401K-1787467.1-0517-0619
