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Webinar Recap: Calculated Risk’s Top 10 Questions Of 2017

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Trucking along with our String Opportunity 2017 Webinar series, we recently had financial blogging guru Bill McBride of Calculated Risk fame.  McBride spoke about the Top 10 Economic Questions For 2017 – a framework he uses to assess the economy’s overall performance and predict how things will pan out.

Here’s what interested him most about 2017:

10. Will housing inventory increase or decrease?

9. What will happen with house prices?

8. How much will Residential Investment increase?

7. How much will wages increase?

6. Will the Fed raise rates, and if so, by how much?

5. Will the core inflation rate rise? Will too much inflation be a concern?

4. What will the unemployment rate be in Dec 2017?

3. Will job creation slow further?

2. How much will the economy grow?

1. What about fiscal and regulatory policy?

*Spoiler Alert*

If you want to watch the full video of the presentation, or take a peek at the slides, click here and here respectively.

Ok, got that out of the way?  Good.  So here’s what McBride sees for the rest of 2017 and what was accurate or not.

The Right

As Bill explained in the webinar, the most interesting years are the ones where he is mostly wrong. Fortunately for us and the post crash recovery, this year has not been economically interesting. Residential Investment, GDP growth, job creation, all increased, albeit at a nominal, steady pace, which Bill predicted quite accurately.

The Wrong

While the overall economy is humming along as Bill predicted, he was off about a few things.  For instance, house prices have continued to rise more than he thought they would, primarily because home inventory continues to decrease.

The other big incorrect assumption was around regulatory and fiscal policy.   With almost none of the infrastructure, healthcare and regulation reform promises being fulfilled, there continues to be a huge question mark looming over the country at large.

Conclusion

Overall 2017 is unfolding somewhat as expected.  There will probably be less housing inventory – and slightly more house price appreciation.  Inflation is softer than McBride expected, which will most likely lead to no more rate increases the rest of the year. And finally, policy will continue to remain a wildcard for the foreseeable future.