1. A Presentation to the CSAC Southern California Counties Regional Meeting Wells Fargo Asset Management is a trade name used by the asset management businesses of Wells Fargo & Company. Wells Capital Management | September 2016 The Economic and Financial-Market Outlook Through 2017: A Slow Transition From The Post-”Meltdown” Economy Gary Schlossberg, Senior Economist Irvine, California September 22, 2016

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4. 4 4 AN UNUSUAL INTEREST-RATE CYCLE IN 2015? A Cautious “Sea Change” In Monetary Policy --A More “Internationalist” Federal Reserve An Eroding, But Still-”Friendly” Backdrop For Long-Term Rates --Moderate Growth, Subdued Inflation (With A Caveat) --Foreign “Flight-” And Yield-Driven Demand For U.S. Debt A “Bumpy” Ride Higher? --Bracing For A Potentially Unsettling Election-Year Cycle --An Unwinding Of Financial-Market Distortions

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6. 6 The Good News… --No Nationwide Housing “Bubble” --Less Leveraged, Better Capitalized Banks --More Manageable Household Debt Burdens --Fewer Sub-Prime Mortgages …And The Bad --”Shadow Banking” Fills The Traditional-Banking Vacuum --”Illiquidity” Risk Amid Ample “Liquidity” --Weakening Underwriting Standards --Increased Portfolio Leveraging --Inflated Asset Values A REPLAY OF LAST DECADE’S “BOOM-BUST” CYCLE?

7. 7WELLS FARGO ASSET MANAGEMENT  Waning Traditional Catalysts  Rising Inflation, Higher Interest Rates, A Typical Inventory Cycle  Rising Corporate Debt  A Cost-Driven Pull Back In Hiring And In Wage Increases  Weak “Pricing Power”  Rising Wages/ Weak Productivity Growth  Another Asset-Driven Economic Cycle  The Economy’s More Interest-Sensitive Debt Profile NEW AND NOT-SO-NEW U.S. RECESSION RISKS IN 2016-17

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10. 10WELLS FARGO ASSET MANAGEMENT A “NEW NORMAL” FOR THE U.S. ECONOMY? Lingering Fall-Out From The 2008-09 Financial “Meltdown” Policy-Related Distortions In The Financial Market The Great Productivity Puzzle An Aging, Slower-Growing Workforce A Jobs Mismatch Between Skilled And Less Skilled Workers 10

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12. 12WELLS FARGO ASSET MANAGEMENT A FEW SUPPORTS IN THE STRUGGLE FOR MORE SATISFACTORY GROWTH Demographically Driven Market Opportunities Infrastructure Upgrades At Home, Expansion Abroad Commercializing, Integrating Technological Innovations --A New Manufacturing Renaissance? Well-Positioned In A Highly Competitive Global Economy --U.S. Entrepreneurial, Innovative Strengths --Demonstrated Cost-Cutting, Efficiency-Raising Ability Emerging-Market Opportunities --Middle-Class Growth, Urbanization, Human Capital Development Tilting Toward More Growth-Oriented Tax And Regulatory Policies 12

13. 13WELLS FARGO ASSET MANAGEMENT Wells Fargo Asset Management is the trade name of the investment management services provided by certain subsidiaries of Wells Fargo & Company (including Wells Fargo Funds Distributor, LLC, Wells Capital Management, The Rock Creek Group, Golden Capital Management, Peregrine Capital Management, Nelson Capital Management, ECM Asset Management, and Galliard Capital Management) and marketed by Wells Fargo Securities International Limited or ECM Asset Management Limited. Wells Fargo Securities International Limited and ECM Asset Management Limited are authorised and regulated by the Financial Conduct Authority within the U.K. Certain investments are distributed in the United States by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC. Wells Capital Management (WellsCap) is a registered investment adviser and a wholly owned subsidiary of Wells Fargo Bank, N.A. WellsCap provides investment management services for a variety of institutions. The views expressed are those of the presenter and are subject to change. This material has been distributed for informational purposes only, and should not be considered as investment advice or a recommendation for any particular security, strategy or investment product. The material is based upon information we consider reliable, but its accuracy and completeness cannot be guaranteed. Past performance is not a guarantee of future returns. As with any investment vehicle, there is a potential for profit as well as the possibility of loss. For additional information on Wells Capital Management and its advisory services, please view our web site at www.wellscap.com, or refer to our Form ADV Part II, which is available upon request by calling 415.396.8000. NOT FDIC INSURED – NO BANK GUARANTEE – MAY LOSE VALUE WFAM– Disclosure