Bank economists bullish on recovery, but see interest rates rising

The bank economists also predicted that consumer spending will grow by roughly 3 percent this year and next, and expects real GDP to grow at just over 3 percent through 2011. 

In addition, they expect the Federal Reserve to start raising interest rates, but they do not think it will have an adverse effect on the economy. 

The economists also do not foresee the financial turmoil in Europe affecting the U.S. because of the bailout by EU leaders. 

"The most notable effect on the U.S. will be lower U.S. exports globally due to a weakening European economy and a strengthening dollar," Hoffman said.