The U.S economy grew 1% in the fourth quarter of 2015, down from 2% in the third quarter of last year. Greg Braca, head of corporate and specialty banking at TD Bank (TD - Get Report) , said increased spending from gainfully employed consumers will cause growth to pick-up this spring.
"We are seeing a lot of strength in the consumer segment, we do see that there is going to be investment from corporations, M&A and real estate continue to be strong so 2% to 3% growth is a reality," said Braca.
U.S. consumers finally appear to be dipping into their accumulated savings from a year's worth of low gasoline prices and rising wages to spend on discretionary items like clothing and electronics. He added that home sales are also expected to rise heading into the spring selling season.
"We are starting to see some of the retail homebuilders back in the game, not just urban multi-family towers going up," said Braca. "That means we are starting to see home formation and construction starts."
On the corporate side, Braca said businesses are starting to borrow to expand as well, especially on the technology side.
"Companies are flush with liquidity on their balance sheets and they have been putting it to work and that's been born out on the M&A market," said Braca.
Regarding banks, Braca said the financial sector has been less volatile despite the selloff in stocks to start the year. He said bankers have generally stepped away from engaging in "boom to bust cycle" lending and are taking a more reasonable approach.
Still, low interest rates dog the sector's profitability. On that note, Braca said it is clear that the Federal Reserve will continue to take a risk-management approach and will hike rates as long as it sees improvements in domestic growth.
"For a rate hike to occur in June, we need to see some calming in financial markets and strong evidence that our economic fundamentals are strong," said Braca. "June appears to be an ideal time for the next modest rate hike and we can likely expect another rate hike before the end of the year."