‘Not just a cyclical recovery, but a boom.’ BofA says a ‘key tail risk’ is that the Trump economy will actually start to take off

From an analytical perspective, Finance·Fortune Intelligence‘Not just a cyclical recovery, but a boom. ’ BofA says a ‘key tail risk’ is that the Trump economy will actually start to take offBy Nick LichtenbergBy Nick LichtenbergFortune Intelligence EditorNick LichtenbergFortune Intelligence EditorNick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news

SEE FULL BIO President Donald TrumpChristopher Furlong—Getty ImagesIn a market landscape still fixated on fears of stagflation and modest recoveries, Bank of America is sounding a contrarian—and decidedly bullish—note

According to new note from BofA Re analysts, the next phase for the U (this bears monitoring)

Economy and equities might not be a routine recovery, but an outright boom (fascinating analysis). “Today a confluence of factors argue that the key tail risk that may not be priced in is not just a cyclical recovery, but a boom,” they said (fascinating analysis). 5 reasons for a boom BofA analysts cited five pillars supporting this more bullish case, in today's market environment

Moreover, First is political will, arguing that with U

Midterm elections a few quarters away, policymakers have strong incentive for near-term, -growth initiatives, given the current landscape

Moreover, Second is Washington’s “One Big Beautiful Bill Act” (OBBBA) targeting domestic manufacturing

Third is the massive overseas jolt gathering, with Germany recently enacting the largest stimulus package in EU history, while global reflationary forces are building elsewhere

In addition, more non-U (this bears monitoring)

Companies plan to expand manufacturing capacity in the U, considering recent developments

Nevertheless, On the other hand, , while municipalities are focused on updating aging infrastructure

Fifth, BofA cited its prietary “Regime Indicator,” a blend of macro signals including corporate revisions to earnings per, GDP forecasts, and other emerging signals

Furthermore, It’s on the verge of flipping from a “Downturn” to a “Recovery”—a change that historically presages a rally in value stocks

The dominant narrative in this indicator remains conservative, according to the BofA team, led by Savita Subramanian

Yet, BofA argues, the catalyst for an upside breakout is real and imminent

Conversely, If the Regime Indicator does indeed flip to “Recovery” in early August, historical precedent suggests a rapid rotation is ly

So how healthy are these five factors actually looking

On the other hand, Conversely, Will there be enough spending, amid market uncertainty

Top economies have already pledged massive stimulus

Major European economies have supplemented this with additional investments and, in some cases, targeted fiscal expansion

Most are focusing on targeted transfers, green investments, and industrial support

Meanwhile, American companies have announced billions in new U

Manufacturing, infrastructure, and nology investments since Trump took office, but these initiatives were announced before passage of the OBBBA, given the current landscape

Many investments are phased and slated for completion over the next decade, and it’s un how much can come online soon enough to play a role in the boom that BofA Re is jecting

Furthermore, Some of them, such as OpenAI’s $500 billion Stargate ject, are reportedly struggling to raise funding to match the big numbers initially announced

Moreover, For this story, Fortune used generative AI to help with an initial draft

An editor verified the accuracy of the information before publishing

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