With bank stocks way up and the Dow Jones industrial average opening above 11,000 today for the first time in a year and a half, experts say the economic recovery could be well on its way, but will take time to reach Main Street.
"I have to say, it's mostly psychological for most people," ABC News contributor and president of Ariel Investments Mellody Hobson told "Good Morning America" today. "[But] I'm extraordinarily optimistic about this rally. And I think it has legs."
Though stock futures predict a possible dip below 11,000 today, the last time it was this high was in 2008, right before the fall of Lehman Brothers and the near collapse of the entire financial system. Stocks in the banking sector alone have climbed more than 170 percent since last March.
"You have seen any number of positive economic indicators that show that the consumer is buying again and companies are getting more healthy, and all of that incrementally drove stock prices up," said Wall Street Journal Washington Bureau Chief John Bussey.
"The recovery is real," Hobson said. "The economy is improving. Companies are lean and mean... [and] the rest of the world is settling in and starting to do better."
But that doesn't mean hiring will pick up all at once. According to Wall Street Journal Economic Correspondent Jon Hilsenrath, many companies are seeing profits in part because of cost cutting and hiring freezes.
"We're kind of in a twisted system because corporate profits are higher because they haven't been hiring," Hilsenrath said. "We could see a slow return for hiring, but it's not off to the races. ... This is still not a good time to be unemployed."
Ther remains one dark cloud on the economic horizon. According to Hilsenrath, despite the Treasury Department's aggressive commitment to enhancing financial regulations, it's a near certainty that shady dealings, which were partly responsible for the economic downturn, will strike Wall Street again.
Today the New York Times reported that Lehman Brothers used an "alter-ego" firm to funnel its cash behind the scenes and that Washington Mutual reportedly engaged in "fraudulent" lending.
"The history of finance is the history of swindles," Hilsenrath said. "The regulators are trying to be tougher right now... [but] Wall Street's going to be ahead of the regulators at some point. It's going to happen again."
As the stock market rallies, economic experts expect interest rates to climb and businesses to begin borrowing more money.
That interest rate hike could affect Americans' borrowing power on everything from small businesses to car loans. Higher mortgage rates are expected and have already moved up almost half a percent from record lows a year ago for 30-year fixed rate loans.
There could also be a burden for prospective home buyers. An increase of 1 percentage point in mortgage rates adds as much as 19 percent to the total cost of a home. Credit cards rates could also be on the rise. They now average more than 14-and-a-quarter percent, draining $200 from the average family's pocket each year.
But while rising interest rates "aren't good for stocks or the market overall," Hobson said they will not increase quickly.
"Fears of rapidly rising rates are overblown," she said. "I'm not worried."
Hilsenrath agreed, noting that the Federal Reserve plans to keep interest rates low for "at least several more months."