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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.

Go deeper

Dion Rabouin, author of Markets
Feb 23, 2021 - Economy & Business

Commodities hit 8-year high as market divergence continues

Expand chart
Data: FactSet; Chart: Axios Visuals

Tech stocks suffered some big losses on Monday, as the specter of higher U.S. borrowing costs continued to weigh on their share prices, while bullish vaccine expectations helped make the Dow the only major U.S. index to end in the green.

What happened: The benchmark 10-year Treasury yield rose to 1.37%, a fresh one-year high, showing investors remain bullish on the economy and a recovery in inflation.

M&T Bank is the latest to snap up another regional lender

Data: FactSet; Chart: Andrew Witherspoon/Axios

M&T Bank today became the latest to glom on to the "bigger is better" mentality swarming regional banks.

Why it matters: It adds to the parade of regional lenders — which have taken an active role in distributing PPP loans — swallowing each other in an effort to survive a more treacherous backdrop.

  • Net interest margin — a key way banks make money — collectively hit an all-time low for U.S. banks last year. The culprits: low interest rates and sluggish lending.
  • There's also growing competition from big players, like JPMorgan and Bank of America, that are bulking up in additional states and offering more digital banking options.

Details: M&T is buying People's United Financial for $7.6 billion in an all-stock deal.

  • The combined bank would have roughly $200 billion in assets, per the release. That catapults M&T to the fifth-largest regional bank by this measure, according to FactSet. (Previously, it was the 10th).
  • Yes, but: Even with the tie-up, M&T won't crack the top 10 biggest banks overall by assets.

The big picture: Today's action follows PNC Financial's purchase of BBVA's U.S. branches last year, which — if approved — would create the largest regional lender in the U.S.

  • Another: Huntington announced it would buy regional peer TCF Financial late last year, giving them combined assets of roughly $170 billion.

What they're saying: Part of the thinking is you can consolidate then grow that way, says Stephen Biggar, a banking analyst at research firm Argus Research.

What to watch: The regional tie-ups are among the first bank deals that will face regulatory scrutiny in the Biden era.

  • Executives expect the deal will close in the fourth quarter of 2021.
Mike Allen, author of AM
29 mins ago - World

Airbnb doubles number of Afghan refugees it will house to 40,000

Afghan refugees arriving at Dulles International Airport in Virginia in August 2021. Photo: Kent Nishimura/Los Angeles Times via Getty Images

Airbnb CEO Brian Chesky and co-founder Joe Gebbia said during a visit to Washington on Wednesday that they're offering temporary housing to 40,000 Afghan refugees worldwide, doubling a previous commitment.

The big picture: The housing typically lasts several weeks, and Airbnb and Airbnb.org provide subsidies to hosts.