Thursday, May 4, 2017

Video: 2017 Economic and Market Overview – New Administration Brings Change

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.
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. 

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*As of June 30, 2016. 401K-1787467.1-0517-0619