Financial analysts in the University of Iowa's Tippie School of Management Master of Business Administration (MBA) program expect slow and steady growth in the U.S. economy over the next six months, with the government sequestration causing limited economic impact, according to a news release.
The 11 equity analysts are portfolio managers for Tippie full-time MBA program's student-managed Henry Fund, a portfolio of stocks valued at nearly $3 million. In the team's recent quarterly economic forecast for March, the students anticipate gross domestic product (GDP) growth of 2.18 percent over the next six months. The growth rate for 2011 was 1.7 percent.
The team also expects limited movement in equities markets, anticipating that the Standard & Poor's 500 index will be at a level of 1,506 over the next six months. The barometer closed 1,560 on March 14.
The students don't think the sequester will have much of an impact because of the actual cuts - about $85 billion - are a small percentage of the government's overall spending of more than $3.3 trillion.
However, the students expect inflation to pick up this year, with overall inflation rate of 2.29 percent.
The team sees similarly slow but steady growth over the next two years, forecasting GDP growth of 3 percent and inflation at 2.29 percent through March 2015.
Click here for more information on the Henry Fund's current economic forecast.