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BMO Capital Markets

BMO Capital Markets

December 21, 2010 10:01 ET

REPEAT-U.S. Growth On the Horizon: BMO's Dr. Sherry Cooper Releases Top Ten Economic Predictions for 2011

BMO Capital Markets Chief Economist Dr. Sherry Cooper, Most Accurate Economist in 2010, Says, "Growth will come, in part from the compromise tax bill and business investment."

NEW YORK, NEW YORK--(Marketwire - Dec. 21, 2010) - Dr. Sherry Cooper, BMO Capital Markets Chief Economist, today released her top ten economic predictions for 2011, forecasting that "the U.S. economy will grow by at least three per cent."

Dr. Sherry Cooper's Economic Forecast, Ten Predictions in 2011:

  • U.S. growth in 2011 will be at least three per cent, boosted by the stimulus of the compromise tax bill and quantitative easing by the Fed.

  • The tax bill, which allows companies to fully expense the cost of equipment purchased in 2011, which will boost business investment, increase productivity and further stimulate job creation.

  • The unemployment rate will finally edge downward to just nine per cent as inflation remains muted and interest rates rise only moderately by year end.

  • The Fed will be on hold throughout 2011, marking the third straight year of no interest rate changes by the U.S. central bank, and three straight years of zero interest rates.

  • The three-decade bull market in bonds will finally end and stocks will perform well. The savings rate will inch upward to around six per cent (triple the level before the recession).

  • Despite reports of its imminent demise, the U.S. dollar will hold its own next year, weakening only slightly against a basket of major currencies.

  • Trade tensions with China could heat up as the U.S. trade deficit continues to widen and the Chinese currency rises (only moderately).

  • Commodity prices will rise solidly, despite moderate growth in G-7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, and United States), as the emerging market recovery forges ahead at a robust pace.

  • Oil could test the $100/barrel threshold for the first time since the financial crisis in the fall of 2008.

  • Even with widespread concerns over the Fed "printing money" and stronger oil prices, inflation will be barely above one per cent.

Dr. Cooper heads the North American economics team at BMO. Her team was recognized for providing the 'most accurate forecasts' among 50 other top North American economic forecasters, as part of the Blue Chip Economic Indicators survey from 2006 to 2009, which spanned the years of the financial crisis. For this, Dr. Cooper received the 2010 Lawrence R. Klein Award for Economic Forecasting Accuracy.

Dr. Cooper has repeatedly been called one of the most influential women in Canada. She has an MA and PhD in economics from the University of Pittsburgh and began her career at the Federal Reserve Board in Washington, D.C. Following five years at the Fed, she joined the Federal National Mortgage Association (Fannie Mae) as Director of Financial Economics and moved to Canada in 1983 to become Chief Economist at BMO Capital Markets. She has since taken on the additional role as Global Economic Strategist at BMO Financial Group. She is a popular speaker, frequently quoted by the media, and has published three books. Dr. Cooper's third book, The New Retirement: How It Will Change Our Future, was released in January 2008.

About BMO Capital Markets

BMO Capital Markets is a leading, full-service North American financial services provider, with more than 2,000 employees operating in 14 North American offices and 26 worldwide, offering corporate, institutional and government clients access to a complete range of investment and corporate banking products and services. BMO Capital Markets is a member of BMO Financial Group (NYSE:BMO)(TSX:BMO), one of the largest diversified financial services providers in North America with US$404 billion total assets and more than 37,000 employees as at October 31, 2010.



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