Bank of America strategist Michael Hartnett identifies a nominal "boom loop" in the U.S. economy.
Government spending, rising prices, and corporate sales drive this growth. Underlying economic reality may remain weaker than headline figures.
Hartnett predicts nominal U.S. GDP will rise nearly 75% from its pandemic low. He projects this level by 2027.
Bond market pressure creates significant risks for this expansion. Rising long-term yields threaten equities, consumers, and government finances. These pressures could undermine the factors fueling nominal growth.
The analysis continues Bank of America’s cautious stance on market valuations and economic stability.