Recent economic data reports have helped to fill in the picture of the economy in the first half of the year. However, investors should be more concerned with the prospects for the second half of the year. No surprise, economic expectations remain sharply divided along political lines. Optimists and pessimists should both be wrong, as the economy muddles along in the second half. A mediocre pace of growth ought to be as good as it gets in the new normal. There are some downside risks, reflecting possible policy mistakes.

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