US Economy Could Grow 5% in Late 2014: Fund Manager

Despite pullbacks in stocks, the bull market likely has a "way to go" in anticipation of "much more robust economic growth" over the next few years than many economists expect, portfolio manager Ed Keon says in his mid-year outlook.

"The call is a 5 percent quarter—maybe two, but I think one—sometime in the second half of next year," Keon of Prudential's Quantitative Management Associates said on CNBC Thursday.

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"The U.S. economy is like Secretariat with a sumo wrestler as a jockey," he joked in a "Squawk Box" interview, saying that if the federal government steps aside "the underlying strength of the private economy will shine through."

He added that the 2013 tax increases knocked down growth by 2 to 3 percent but by next year the impact should diminish.

"At the same time," he continued, "you had cuts in both federal and state and local government spending that in the first quarter also pulled about 1 percent out of what GDP growth would have been otherwise."

Keon also pointed out that state and local government tax collections were up 10 percent from the first quarter. "You'll start to see that state and local governments will be positive contributors to GDP," he said.

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The resilient U.S consumers are also "back and feeling better" because of their increase in wealth due to the gains in the stock market and the recovery in housing, he wrote in his mid-year outlook.

He also made the case that the bull market will only end when stocks become overvalued, and "we are still far away from that."

"[So] if you sum our rough estimates above and add a 2 percent current GDP run rate, you would get GDP of 5 percent to 6 percent," he wrote. "This might seem implausibly high today, but if we are correct, it could be routine in a couple of years."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.