The welcome return of the Lyons, UD economic forecast
February 20, 2019
Good afternoon,
It was great to return of the annual Lyons Companies-University of Delaware forecast at Clayton Hall on the UD Newark campus. For investors and business people, the free event provides information that get-togethers with an admission charge of $100 or more are hard-pressed to duplicate.
The forecast had taken a hiatus last year, due to scheduling conflicts. Later in the year, we learned of the untimely passing of Lyons founder David Lyons.
The family-owned commercial insurance business soldiered on after David’s death and the forecast returned on Tuesday.
The forecast gets national attention in the financial media thanks to appearances by regional presidents of the Federal Reserve. This year was no exception as Cleveland Fed President Loretta Mester (in the above photo) was the keynote speaker.
Mester chose her words carefully but made it clear that the Federal Reserve is making a transition in its decision-making process that sets interest rates. One key issue is communicating the economic outlook and its relationship to monetary policy.
As you know, random comments and speculation can bring wild swings in financial markets and all speakers see more volatility in global markets.
Mester noted that inflation remains in check, despite signs of rising wages. Her outlook – a slower rate of sustained economic growth.
She did not rule out events that could change that outlook but added that the Fed would not react to every gyration in the economy and has a mandate from Congress that maintains its independence.
As you know, President Donald Trump has not been happy with Fed interest rate hikes under Chairman Jerome Powell.
Washington, DC money manager Michael Farr, who has been a part of the Lyons-UD forecast for most of its history, does see danger signs ahead.
He pointed to soaring national and corporate debt, the concentration of wealth in the hands of a few and an opioid epidemic that is cutting the average life expectancy as younger people succumb to overdoses.
The opioid crisis is also contributing to a labor shortage that has made its way into manufacturing and construction.
Farr is no fan of last year’s tax cut and says the stimulus was not needed, given the overall strength of the economy.
Travelers executive Joan Woodward also talked about the political scene. Based on the strength of his base, Woodward believes that President Trump stands a good chance of gaining a second term.
Woodward sees little chance that Congress or the White House will deal with time bomb issues like the deficit unless the situation erupts into a full-blown crisis that we have seen in other nations.
Woodward knows something about D.C. having worked for the late Delaware U.S. Sen. Bill Roth and in serving as a public affairs chief for the insurance giant.
As long as the economy remains strong, many attendees at the event will not lose sleep over Woodward’s prediction.– Doug Rainey, chief content officer.
