Swiss Re Chief Economist Sees Stronger U.S. Economy by Year End

On the heels of the U.S. Federal Reserve’s decision to maintain the target fed funds rate at zero to 25 basis points Swiss Re’s Chief Economist, Kurt Karl, said: “The U.S. economy has been weak recently, but is likely to strengthen in the second half of the year.” He says, “While downside risks to the global economic outlook have increased lately, along with the uncertainty surrounding the future of the Euro area, recent indicators continue to suggest that moderate growth of the U.S. economy will be sustained. Consumer spending remains resilient, vehicle sales are strong, construction spending is growing, and more signs point to further improvement in housing activity. Housing starts and sales are up and prices appear to have bottomed-out. Real GDP growth is expected to rise from about 2 percent this year to 2.5 – 3 percent next year. … Yields on the 10-year treasury note are forecast to rise to 2.2 percent by end-2012 and to 2.8 percent by end-2013.”