1. GDP growth this year will average only 1.6%, reflecting damage of the government shutdown, but will jump to 2.9% for next year and unemployment will be “only” 6.6% by the end of 2014.
2. Inflation remains tame at 1.8% at the core level through next year.
3. Interest rates will move up sharply from about 2.5% for 10-year Treasuries now to 3.25% next year.
4. The S&P 500 will end this year about where we are now (1,750) but end next year at 1,900.
5. Oil will continue to fall about 10% through next year.
6. Gold and cooper will both fall. Gold is expected to drop from about $1,325/oz to only $1,030, while cooper will drop from $6,600/ton to $6,200.
7. The dollar will appreciate against the Yen but depreciate slightly against the Euro.
8. Tapering of quantitative easing will not begin before March.