America’s economy stands out in various ways, including its monetary policy. Central banks in Canada, Sweden, and the euro zone have recently begun cutting interest rates, yet the Federal Reserve in the United States has postponed its plans for monetary loosening. Despite higher rates and falling inflation, the Fed is expected to make only a modest cut of one quarter of a percentage point this year.
The relative economic vigour of America is notable, especially in comparison to other countries grappling with political dysfunction and fiscal challenges. While the euro zone is projected to grow by 0.9% in 2024, real-time estimates suggest America’s economy is currently growing at more than three times that pace. China is facing a property crisis, Japan is defending its weak currency, and Britain is struggling with productivity issues.
Despite these global challenges, America’s strong growth and a robust dollar have led to an increase in its share of global GDP at market exchange rates. This growth is particularly impressive considering the economic struggles faced by other major economies around the world.