Feb 24, 2021 - Economy

U.S. economic growth expectations go higher still

Jerome Powell.

Federal Reserve Chair Jerome Powell. Photo: Caroline Brehman/CQ-Roll Call, Inc via Getty Images)

Fed chair Jerome Powell was the latest to cosign higher U.S. growth expectations on Tuesday, agreeing that he could see the U.S. economy growing in the range of 6% in 2021 and reaching its pre-pandemic level by the first half of this year.

Why it matters: Powell joins an expanding chorus of economists and investors who see the U.S. growing much faster than expected this year, reaching annual GDP growth not seen since the 1980s and about three times the average growth rate of the past 15 years.

State of play: Banks and asset managers are going even bigger with their predictions. Deutsche Bank chief U.S. economist Matthew Luzzetti revised his GDP projection up by 1.5 percentage points on Tuesday to 7.5%, based on fourth quarter comparisons.

  • That's as high as Goldman Sachs' economists, who had previously been far more bullish than other major Wall Street banks.
  • Luzzetti's projection is largely based on expectations for Congress to pass a fiscal stimulus bill closer to Biden's $1.9 trillion target than initially thought.
  • Most economists had been expecting the stimulus to top out at around $1 trillion.
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