Taps Coogan – July 27th, 2021

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Dr. Ed Yardeni, creator of the highly informative website Yardeni Research, recently spoke to Fox Business to share is robustly bullish outlook for the economy. While he sees the economy slowing in the second half of the year, Dr. Yardeni sees real growth in the second half of the year exceeding 3% and staying above pre-Covid rates for the long haul, ushering in a new era of higher trendline growth on the back of productivity gains.

 

Some excerpts from Dr. Yardeni:

“There is no doubt that the economy is going to be growing in the second half of the year but certainly there’s no doubt that it’s going to be growing at a slower pace than the first half of the year. But I am looking for 3% to 4% real GDP in the second half, which is awfully good. The earnings side of the equation looks really good…”

“The stock market was a bit freaked out by what was going on in the bond market. Bond yields were coming down… and this morning everybody got up and said ‘Wait a minute, if bond yields are this low, they don’t look terribly attractive to invest in. Maybe we should look at stocks, which just got cheaper yesterday.'”

“We seem to have forgotten that normal was about 2% real GDP growth prior to the pandemic… We’re not going to keep going at 6%. We’re probably going to drop back down to 2%, but I am actually more optimistic than that. I don’t think that it’s actually going to be normal ahead. I think productivity if going to make a comeback… Productivity is going to lead to what I think is the roaring 2020s ahead…”

Nobody accuses Dr. Yardeni of being a bear. He has been degrees of bullish for a decade-plus, to his credit. Let’s just hope the ‘Roaring 2020s’ don’t end the way the Roaring 1920s’ did. 

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