An endearing holiday-season tradition in Charlotte is the chamber’s annual gathering of influential CEOs, who field softball questions as they forecast the coming year’s economy.
This year’s moderator, Chris William of Wells Fargo Advisors, elicited some interesting responses from the senior executives, and a senior Federal Reserve official, on a variety of topics.
Richmond Fed President Jeff Lacker made international news by saying more than three rate hikes may be needed in 2017 in an effort to gradually cool off the U.S. economy. Most analysts have predicted there will be one or two increases in rates.
Bank of America’s Brian Moynihan was chipper about U.S. growth potential, predicting a strengthening outlook. He noted that “the bookies were wrong” in 2016, making the wrong calls on the Brexit, Donald Trump and Italian leadership elections. Trump’s election produced a “release of enthusiasm” that was unprecedented, he said.
Had one known about surging global populism a year ago, most would have expected a serious recession, he said. Instead, capital spending is likely to increase significantly as rates remain low and businesses gain confidence.
David Carroll, the Charlotte-based senior executive vice president of Wells Fargo & Co., was equally positive. “The cheapest form of stimulation is optimism,” he said, with many businesspeople pleased with the potential for less regulation in a Trump administration.
But Susan DeVore of Premier Inc. noted that campaigning is easier than governing. The Republicans’ pledge to repeal Obamacare needs to coincide with a solid replacement plan, she said. Taking away health care from 20 million people without an alternative is troublesome, she said. “Those are real people,” DeVore said, adding that another 25 million Americans remain uninsured.
But the new administration’s views on health care seem to suggest doctors will have more control, which is why some private-equity groups are likely to buy independent physician practices, DeVore said. Money follows opportunity.
A chunk of the discussion centered on the sad polarization of the U.S. political system. It hasn’t been this bad since Teddy Roosevelt’s days, Carroll said. “We need to make it cool to be civil,” DeVore added.
The comments came as the rancor at the North Carolina General Assembly reached a fever pitch, following passage of controversial legislation to limit the power of Gov.-elect Roy Cooper. Gov. Pat McCrory attended the luncheon and handed out Order of the Long Leaf Pine awards to two of his long-term backers, BofA executive Cathy Bessant and Bissell Cos. President Ned Curran, who is also board chairman of the N.C. Department of Transportation.
McCrory, who leaves office in January, heard the comments urging more bipartisanship, but said nothing about the issue. He left the event without talking with reporters.