THE US economy is doing better than expected but it’s not the only one.

Gross domestic product (GDP) growth of 2 per cent in the first quarter was followed by 2.4 per cent growth in the second quarter, and the Atlanta Fed GDPNow forecasting model currently suggests growth of 5.9 per cent for the third quarter. The implication of this re-acceleration in US GDP growth is that the US Federal Reserve (Fed) will likely need to maintain interest rates at current high levels for an extended period to get inflation back to its 2 per cent target. This has resulted in stock and bond markets globally running into some turbulence over the past couple of weeks as investors reprice expectations of central bank policy rates staying higher for longer. So, for instance, the benchmark 10-year US treasury yield has jumped 38 basis points in August (August 21) despite inflation moderating to 3.2 per cent in July from its 40-year peak of 9.1 per cent in June 2022. Additionally, the benchmark S&P 500 equity index has retreated by almost 5 per cent in August.

https://www.jamaicaobserver.com/business/staying-high-for-longer/