US | Will the economy continue to hold surprises?

A year ago, most analysts predicted that the U.S. economy would enter a recession in 2023 due to the Fed's monetary policy rate hikes aimed at dealing with the inflation surge that occurred at the end of the most critical phase of the pandemic.

Key points

• Key points:
• Over the last 50 years, the U.S. economy has gone into recession whenever there have been sharp increases in the monetary policy rate—and this cycle has seen the sharpest increases in the last four decades.
• However, not only has this not happened, but the economy continues to grow vigorously, with GDP increasing at an annualized rate of 4.9% in the third quarter. Two phenomena account for this extraordinary resilience.
• First, there is the fact that, at the beginning of the upward cycle, households had exceptionally high levels of excess savings—above the historical trend—due to the substantial transfers that the government granted to a large percentage of the population and due to the savings that households generated as a result of the lockdown measures.
• The other factor that explains the unexpected dynamism of the U.S. economy is that companies met the beginning of the upward cycle with high levels of liquidity, having taken advantage of the ultra-low interest rate scenario caused by the pandemic.

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