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Thanks to a blistering second quarter, the U.S. economy now has a positive output gap for the first time since 2007, points out the research team at National Bank Financial.

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“While consistent with a late cycle, that’s not to say a downturn is imminent. Consumption spending, the main engine of the U.S. economy, is in excellent shape thanks to prior deleveraging and a solid labour market. Pro-cyclical fiscal stimulus from Washington should also help extend the expansion into 2019 and offset any drag from Fed interest rate hikes.”