Prudential market experts say they expect the U.S. economy to continue its recovery and still fragile global markets to begin to stabilize over the rest of the year and into 2014. However, U.S. fiscal policy remains a drag on the economy and Federal Reserve policy could create some volatility depending on when the Fed decides to begin easing interest rates higher, through the so-called “tapering” many have been expecting. The experts, all from businesses of Prudential Financial, Inc. (NYSE: PRU), outlined their views today at the Prudential 2013 Midyear Global Markets & Economic Outlook briefing in New York City. A replay of the outlook briefing is available on Prudential’s newsroom. Ed Keon, managing director of Quantitative Management Associates and a member of its asset allocation team, said stock markets have come roaring back following the recent financial crisis and a “near-miss” of a second Great Depression, more than doubling from their lows of March, 2009. Though many investors remain fearful as they watch carefully to see how the Federal Reserve may alter its policy, he believes the economic recovery is likely to continue and could lead to robust GDP growth in 2014. “Extraordinary actions by the U.S. Federal Reserve have had a profound influence on the markets and the economy, but if the Fed reduces its support, will the economy and the markets come crashing back to earth?” Keon said. “Might the Fed’s actions so far have already sown the seeds of future inflation and instability? Ultimately, we offer an optimistic view of the economy, and suggest that the recovery is real and likely to gain strength over the next couple of years.” Quincy Krosby, a Prudential market strategist, noted that the U.S. is on the road toward interest rate normalization as long as the data continue to gain traction. She also said that global markets will face detours along the road to normalization.