Looking Back, Glancing Ahead

As my regular readers know, every January I go out on a limb and make my 10 predictions for the coming year. But, before I take a crack at 2017, it is only fair to grade how I did with my predictions for 2016.


No. 10: Starting with the easiest, we will undoubtedly elect our first female president in 2016. I think the economy, and deck, are stacked against whoever ends up being the GOP candidate.
My grade: F

No. 9: The Federal Reserve will forgo any interest rate increases in 2016. I predict that the Federal Open Market Committee will be "one and done" at its December meeting.
My grade: B

No. 8: Our national economy will continue to expand, albeit at a relatively slow pace of less than 2.5. Slow growth will be accompanied by even lower rates of inflation.
My grade: A

No. 7: Driven by continued low interest rates, the equity markets will continue to plod higher, but volatility will be the rule as opposed to the exception.
My grade: A

No. 6: The U.S. dollar will continue to strengthen against the euro, making European vacations attractive for Americans.
My grade: A

No. 5: The price of gas might see its high for the year on Jan. 1, 2016. OPEC is a mess and Saudi Arabia and Iran need cash, so they will keep oil product up.
My grade: C

No. 4: The most affordable gas prices in a decade will finally lead the American consumer to start spending again, which will be great news for the overall U.S. economy.
My grade: B

No. 3: I am going to try it one more time: Homeownership will begin to make a comeback. We are currently at the lowest homeownership rate since the early 1950s. Housing affordability, coupled with escalating rental rates, will drive millennials to buy homes, which will be another positive factor for the U.S. economy.
My grade: C

No. 2: Auto and truck sales will continue to increase above the 18 million annualized rate as we replace our aging car fleet and construction makes a comeback.
My grade: C

No. 1: With Paul Ryan as the Speaker of the House and President Barack Obama in his final year, we may actually see Congress and the White House come together and deal with long-term issues such as corporate tax reform and immigration. Not an easy thing to accomplish in an election year, but possible.
My grade: F

In reviewing my predictions for 2016, I give myself a solid B. I earned two F’s for both of my political predictions, but I can certainly take comfort in the fact that I had a whole lot of company there.

But now it’s time to set my sights on 2017. And this year, with our new president and Republican Congress, my predictions may actually come true. But I guess we’ll just have to wait and see.


No. 10: President Donald Trump will host Russian President Vladimir Putin for a state dinner at the White House.

No. 9: Both personal and corporate income tax reform will take place in the Trump administration’s first 100 days.

No. 8: Trump’s proposed wall along the Mexican border will not be built — in fact, work on it won’t even start. I predict the opposite will happen: The U.S. will actually move to improve our relationship with our southern neighbor.

No. 7: Italy and France will vote to leave the European Union, and the euro will be abandoned as a currency.

No. 6: The Federal Open Market Committee will move to raise the Fed’s funds rate three — maybe four — times throughout the year.

No. 5: With tax reform, infrastructure spending and the repatriation of offshore corporate dollars, the U.S.’ gross domestic product will grow to 3 percent.

No. 4: Important to those of use on Hilton Head Island, the Federal Flood Insurance Program will undergo massive reform, leading private insurers to enter the primary flood insurance market.

No. 3: Despite Trump’s election promises, Hillary Clinton will not go to jail.

No. 2: The Affordable Care Act will undergo subtle changes but definitely will not be overturned, as there are millions of Americans who now have insurance thanks to the program.

No. 1: The equities market as measured by the S&P 500 will end the year over 2,500, an increase of more than 10 percent.

There you go. Once again, I have put it all out there, and I believe that while 2017 may be full of surprises, they will be mostly good.

Elihu Spencer is a local amateur economist with a long business history in global finance. His life work has been centered on understanding credit cycles and their impact on local economies. The information contained in this article has been obtained from sources considered reliable but the accuracy cannot be guaranteed.