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Analysts at Wells Fargo estimate that the US economy will grow around 3% during 2019 and moderating to 2.2% in 2020.  

Key Quotes:  

“The U.S. economy continues to maintain strong momentum headed into fall 2018. Nonfarm employment growth, consumer spending and capital goods orders suggest real GDP will grow at around a 3% pace during the third quarter, and we expect growth will remain close to that pace through 2019. Our forecast now extends through 2020, where we see growth moderating somewhat to 2.2%. The current expansion will become the longest on record if growth continues into the second half of 2019.”

“From a bottom up perspective the economy looks incredibly sound. Strong job growth, higher asset prices and a relatively high saving rate should continue to support consumer spending. Business fixed investment also looks set to grow solidly, with an emphasis on productivity enhancing investment. Inventories are relatively low and government spending looks set to improve modestly in coming quarters.”

“Forecasting economic growth this far into a business cycle is a bit perilous. Recessions are hard to see, even in real time, and even harder to predict several quarters into the future. Reforms enacted in the aftermath of the financial crisis and the generally slow start to the economic expansion have created a great deal of resiliency, and few of the obvious excesses that typically have preceded past recessions are present today.”

“We expect the Fed to continue nudging interest rates up a quarter point higher each quarter until the second half of 2019, when we believe the funds rate will be above its neutral rate. The yield curve is expected to remain positive, however, as long term rates rise modestly.”

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