"Drama" over the U.S. Budget, a "still problematic employment situation" and a "still very depressed" housing market are not deterring a moderate growth pattern and expected "real GDP growth of 3% to 3.5% for 2011 and 2012," according to the latest "Economic and Investment Strategy , 2011 Outlook—2nd Quarter Update," from BNY Mellon Wealth Management.
Though "headline inflation" may tick up "due to rising gasoline prices" –it was 2.7%, year-over-year in March—the Outlook indicates concern for the "intermediate term" rather than short term. The Outlook opines that "deflation [is] no longer a worry," due to the Fed's quantitative easing goal of boosting inflation—to decrease the risk of deflation, and notes that while there is a "Core CPI of 1.2%" year-over-year in March, this is less than the Fed's "target" of about 2%.
Oil
"Reduced supply from Libya" and other Gulf "geopolitical concerns" is pushing to price of oil up, but the report notes that "oil prices can backtrack" if conditions become more "calm" there.
