Analysts say those developments have greatly reduced the risk of a recession this year. Economists say the odds have decreased since then as economic growth has proved to be unexpectedly strong. Many economists say the final measurement of first-quarter growth could be higher still. But business confidence hasn't improved. Businesses have also been cutting capital expenditures, which now account for one-third of overall economic growth.
Some economists expect spending to contract through the second quarter.
But economists say a rebound in capital spending is essential for a full economic recovery. The question on the horizon is how effectively it will be able to take the interest-rate cuts out of the system in the future so imbalances won't occur. She predicted the Fed will gradually begin raising rates next year to reduce the prospect of inflation. Investors, in any case, think the Fed's work in reviving the economy is nearly done. Inc. All Rights Reserved.