Vol 23 (2026) - Issue 5

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Thoughts on the US Economy

Synopsis
Over the past six years, the United States economy has demonstrated sustained resilience amidst a succession of material disruptions, including the COVID-19 pandemic, an extended period of elevated inflation, successive rounds of tariff adjustments, and, most recently, the outbreak of war in the Middle East. Since the onset of that conflict in late February, crude oil prices have risen by 60–80%, and the yield on 10-year US Treasury notes has increased by more than 100 basis points, to 5.00%. Notwithstanding these developments, the economy has continued to expand at a solid pace, defying earlier expectations of a pronounced slowdown or recession. This analysis examines the principal drivers of that resilience, the headwinds now emerging, and the structural risks that could bear upon the durability of continued growth.