Fleet HomeLink Checking Accounts Savings Accounts Certs. The U.S. economy is keeping investors in suspense about its future. We believe that the economy will sidestep a recession and will strengthen over the course of the next year, thanks to the consumer and to the Fed s cuts in short-term interest rates. This would support the recovery of the stock market.
Consumer spending continues to outpace capital spending and exports as a source of economic growth.
Consumer spending has flattened but hasn t fallen dramatically despite an increase in layoffs. The one-time federal tax rebate coming this summer, combined with upcoming cuts in withholding taxes, is likely to encourage consumer spending. Moreover, consumer confidence reached its highest level in June since December 2000. Some observers say that the Fed s rate cuts have failed. It s important to factor in the lag time of six to nine months before Fed rate cuts impact the economy.