Panel Argues Uncertainty Reigns in 2013 for U.S. Economy
NEW YORK (TheStreet) -- Maybe even Barack Obama doesn't know what 2013 will bring to the U.S. economy.
Speaking Thursday on a breakfast briefing panel at Bloomberg, various economists and analysts said that uncertainty in tax reform and financial regulation would make it difficult to predict what 2013 may mean for companies in the United States.
"We are in an era of extreme uncertainty," said Barbara Novick, head of public policy and government relations at BlackRock. "I don't think 2013, even if Dodd-Frank were done, we would be done" with financial reform, said Novick.
JPMorgan (JPM) CEO Jamie Dimon has said that Dodd-Frank legislation could help the bank's foreign competitors, while Goldman Sachs (GS) CEO Lloyd Blankfein has said he would not eliminate the regulatory overhaul if given the option.
As Congress has wrestled over the details of the so-called fiscal cliff -- when tax relief measures and deep spending cuts will automatically go into effect -- major U.S. equity markets have fluctuated on day-to-day news of progress and inaction.
Torsten Slok, chief economist at Deutsche Bank Securities, said that companies want clarity, because going over a full fiscal cliff would be a "significant shock" to gross domestic product.
Novick added that she believed Congress would reach some sort of deal before Christmas, because it would be unlikely that legislators may want to reconvene during the holiday week before the new year.
If there is any certainty investors could take away from the current environment, it's that the composition of the Federal Reserve -- Ben Bernanke will remain the central bank's chairman and that easing policies are unlikely to shift -- won't change immediately, and that the United States won't take risky action as it pertains to China.