add Financial Policy has been added to the list of things that distinguish the U.S. economy. Central banks in Canada, Sweden and the euro zone have all recently begun cutting interest rates. But the Federal Reserve again extended its monetary easing plans on June 12. Despite U.S. interest rates rising more than those of other large developed countries and inflation falling, the median Fed rate setter expects rates to be cut by just 0.25 percentage points this year. Some monetary divergence is a natural consequence of strong U.S. growth. But what is increasingly striking about America’s relative vitality is how vulnerable it is to the threats of political dysfunction and fiscal fragility that are so burdensome in the rest of the world.
According to the European Central Bank’s latest forecast, the euro zone economy will grow by 0.9% in 2024. The US economy is currently growing at more than three times that rate, according to real-time estimates from the Federal Reserve Bank of Atlanta. China is struggling with a real estate crisis and the threat of deflation, Japan continues to defend a weak currency, and the UK has become a byword for abysmal productivity. The combination of robust growth and a strong dollar means the US share of global economic growth is set to grow by 1.2% in 2024. GDP At market exchange rates, the value of the Japanese yen is rising rather than falling as other countries catch up with the world’s largest economy.