Are market monetarists ready to rejoice?
While this growth rate is right according to most market monetarists, (though I am one of those who supports a slower 3% rate,) the problem is that the current growth path is way too low.
What the U.S. needs is a couple of years of nominal GDP growth like occurred under Reagan and Volker in 1983 and 1984, adding up to a near 20% increase over two years. Then the growth rate should slow to something like 5% (or 3%.)
Excessive focus on the growth rate of real GDP (2.5%) is a terrible mistake. If real GDP was close to potential, then the growth rate of real GDP would be very informative. According to the CBO, real GDP was about 7% below potential before and it is about the same now. Nominal GDP was about 14% below the trend growth path the Great Moderation, and it is about the same now.
Look at the growth paths, don't just focus on the growth rates.