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By Jason Stipp and Jeremy Glaser | 10-04-2013 09:00 AM

5 Takeaways From the ETF Invest Conference

Panelists assess the government shutdown, the Fed's next move, prospects for emerging markets, the odds for inflation, and the future for U.S. growth.

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to a special conference edition of The Friday Five. We're here at the Morningstar ETF Invest Conference in Chicago, and joining me, as always, is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: My pleasure, Jason.

Stipp: You have five big takeaways so far from the ETF Invest Conference; what are they?

Glaser: We've heard a lot from a number of strategists about the macroeconomic picture. I think the five big themes that stood out were about the government shutdown, the Federal Reserve, emerging markets, inflation, and finally, the future of growth.

Stipp: Let's talk about what's on everyone's mind, both inside and outside the conference, that's the current shutdown, and also on the horizon the debt ceiling. What are some of the opinions we've heard from presenters so far?

Glaser: This has been by far the biggest topic of conversation. In almost every session, it seems to have come up. The general consensus probably won't be a big surprise to most investors who have been following it so far. That's that the shutdown, as long as it remains relatively short in duration, isn't going to have a major impact on economic growth. Yes, without those paychecks going out, it might shave some growth in the near term, but the long-term impact probably isn't going to be that major.

However, there was a lot more discussion about how the debt ceiling is a much bigger deal and how we should probably be more focused on that from a systemic risk standpoint. Douglas Hodge, who is from PIMCO, talked about the debt ceiling as being a potential problem. He said he thinks that if we did trip over that date, that basically the Treasury would find a way to prioritize those debt payments and we wouldn't actually default. Even if we had to make some big cuts to other programs, he thinks those cuts would be so unpalatable that we'd very quickly come to an agreement, and it wouldn't be such a big deal.

Heidi Richardson from BlackRock was a little bit more concerned. She said that [the debt ceiling] could potentially be a bigger issue. And Austan Goolsbee, who used to be the chair of the Council of Economic Advisers, and who probably had a front-row seat to a lot of this before he left, thinks that we are just going to keep lurching from crisis to crisis when it comes to things like the debt ceiling and this current shutdown.

But generally, people felt like the government would come together eventually on the debt ceiling issue. It's not something … you should fret about too much, but it is absolutely one of the key risks in the short to medium term--if not this time, then when we do this again and again, assuming that no long-term deal is able to be reached.

Stipp: Another topic of conversation is the Federal Reserve. Of course, the Fed is very active in the market. The tapering was going to happen, then wasn't going to happen. The markets reacted in different ways. We still have some question marks on the Fed. What are you hearing?

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