Where are the markets and the economy headed?
Alumni experts examined market trends ranging from Federal Reserve rate hikes to the downturn in oil before a packed audience of students, faculty, parents, friends, and fellow alumni. The discussion, part of the 11th Annual Financial Services Forum, was a featured program during Bryant’s annual Alumni Engagement Day.
Are markets driving the bus? Could low oil prices be a good thing? Can retirees survive on low-interest-rate CDs?
Moderator Tom Tzitzouris ’99, director of Strategas Research Partners and a self-described “macro guy” who is bullish on the U.S. economy, posed the question: “What if energy prices increase and the Fed pushes rates higher and the consumer doesn’t start spending?”
“I think the markets are driving the bus,” said Amica Mutual Insurance Assistant Vice President Jonathan Burke ’03. He sees the Fed increasing interest rates once more in 2016.
Amit Chokshi ’99, portfolio manager for City National Rochdale, believes the Fed will not raise rates again 2016 and he sees long-term opportunity in the oil sector. He also noted that “we’ve seen some recovery in stock prices. You see it before you start hearing about it.”
Chris Goolgasian ’95, ’97 MBA, associate director of the Asset Allocation Strategies Group for Wellington Management Company, cautioned that people in the financial services industry view the world through a Wall Street lens, where low oil prices are seen as troubling. In the real world, he noted, “it’s a great thing” that oil prices are low because that puts $20 back in the wallets of consumers.
Many, including former Fed Chief Ben Bernanke, have argued that everyone fares better when the economy is better, Goolgasian said. “For retirees, I don’t believe that’s true.”
Before the 2008 Recession, he said, people who had saved for retirement could live on the interest from Certificates of Deposit and other short-term investments. Since the Recession, interest rates have been close to zero. “That’s a lot of pain for a lot of people who have been ignored” in the national discussion about the economy, Goolgasian said.