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U.S. Economic & Market outlook Thomas Corcoran Senior Managing Director GE Capital May 13, 2014

U.S. Economic & Market outlook Thomas Corcoran Senior Managing Director GE Capital May 13, 2014. The Latest. No economic growth in Q1 Housing recovery has stalled Geopolitical tensions are rising Some asset prices are a little too high. 2. Tonight’s discussion.

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U.S. Economic & Market outlook Thomas Corcoran Senior Managing Director GE Capital May 13, 2014

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  1. U.S. Economic & • Market outlook • Thomas Corcoran • Senior Managing Director • GE Capital • May 13, 2014

  2. The Latest • No economic growth in Q1 • Housing recovery has stalled • Geopolitical tensions are rising • Some asset prices are a little too high 2

  3. Tonight’s discussion • The Fed will err on keeping rates too low • The impact on the markets • More runway for growth • Less extreme business cycles • Beginning to see fiscal improvements 3

  4. The Fed’s Critical Juncture

  5. Extraordinary Fed response continues

  6. Abundant liquidity still being provided

  7. Labor Markets Slowly Improve 7

  8. A single policy for an uneven situation

  9. There’s Increasingly More Opportunity 9

  10. Expectations Hold Near 2% 10

  11. Gradual pullback from extraordinary accommodation Fed’s likely to state its intentions with less lead time New leadership

  12. Market Accommodated in ’14 So Far 12

  13. Watch short-term Treasuries

  14. The Fed’s impact on the Market

  15. Private credit expansion continues

  16. Latest Market Volatility’s Contained 16

  17. Wealth is being restored

  18. Credit Markets Get More Attention 18

  19. Euro-Zone’s in a Better Place 19

  20. Runway for growth

  21. GDP Mix, Mild Differences 6 Yrs Later 21

  22. GDP’s Grown Despite Dramatic Change 22

  23. Is Moderate Growth Behind Us? 23

  24. The fiscal drag looks set to ease

  25. Consumption - Up 17 Straight Quarters 25

  26. Upside Potential … Bus. Investment 26

  27. Upside Potential … US Exports 27

  28. The Stretched Out Business Cycle

  29. What inning are we in?

  30. Household finances have improved

  31. Watch business inventories

  32. US Fiscal Realities

  33. US Public Debt Crosses GDP • Relative Growth 33

  34. Making Progress, Will it Continue? 34

  35. Big Actuarial Challenges Ahead 35

  36. Fed policy aids the US Treasury

  37. Summary – What to Watch for • Gov’t spending/investment -----> Less fiscal drag • Export growth -----> Dollar is competitive • Full-time job gains -----> Higher pay? • Business investment -----> Uneven, pent-up demand • Housing -----> Will recent slowdown last? • 2-yr UST yields -----> Fed’s policy path • Global -----> Geopolitical developments • Asset markets -----> Low volatility unlikely to last 37

  38. Disclaimer Disclaimer: This material has been prepared by the Interest Rate Management Group ("IRM") of General Electric Capital Corporation. The material is provided to you solely for discussion purposes and does not constitute an offer, agreement, or commitment to lend, provide financing or sell any securities or financing instruments and shall not be construed to create any fiduciary, advisory or other relationship or the provision of any investment advice or service. Nothing herein shall be deemed to obligate General Electric Capital Corporation or its affiliates (collectively, “GECC”) to provide, arrange or syndicate any credit facilities or other financing in favor of you, your affiliates or any other person. No representation or warranty, expressed or implied, is made as to the accuracy or completeness of this material or any information contained herein and nothing contained herein is, or shall be relied upon as, a representation, warranty, or covenant, whether as to the past or the future.  In no event will IRM or GECC be liable for any losses or damages arising from or as a result of the use of the information or the materials contained herein.  The information provided in this material is of a summary nature, is not intended to be complete or final, and was not prepared for use by readers unfamiliar with financial information of the type described herein. Neither IRM, GECC, nor their legal or financial advisors or accountants take any responsibility for the information contained in this material. Neither IRM nor GECC undertakes any obligation to update or otherwise revise this material or any information herein. RECIPIENTS OF THIS MATERIAL SHOULD NOT CONSTRUE ITS CONTENTS AS LEGAL, TAX, ACCOUNTING, INVESTMENT OR OTHER ADVICE. EACH RECIPIENT OF THIS MATERIAL SHOULD MAKE ITS OWN INQUIRIES AND CONSULT ITS ADVISORS AS TO THE MATTERS DESCRIBED HEREIN AND AS TO LEGAL, TAX, FINANCIAL AND OTHER RELEVANT MATTERS.

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