— Longer-term interest rates should rise. The yield on the 10-year Treasury note, now 1.66 percent, is forecast to climb steadily to 2.3 percent during the fourth quarter of 2013 as the Fed draws nearer to reversing its policy of extraordinarily low short-term rates.
— Stocks will rise modestly. The Standard & Poor's 500 index is predicted to be 1,450 at year end and 1,520, or 5 percent higher at the end of 2013. The key market barometer is currently 1,429.
— Corporate profit growth will show moderate but less-than-average increases. After-tax corporate profits are projected to rise 7 percent this year and 5 percent next year, below the 10.2 percent average of the last 20 years.
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