Resilient Consumers and Fading Inflation

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This chapter explores the surprising resilience of American consumers despite concerns over inflation, discussing factors such as savings accumulation during the pandemic and decreased inflation leading to increased wages. It also examines the fading inflation and strong growth scenario, predicting that as supply chains heal post-pandemic, inflation may not reach the Fed's target and interest rates may need to be kept higher than expected, potentially leading to slightly disappointing growth in 2024.

America seems to be in a best-of-worlds scenario: growth is outpacing expectations even as inflation keeps falling—how will the party end? This week’s loss of the Peregrine One Moon lander was disappointing, but our correspondent sees the good news from the launch (9:19). And how Japan’s geishas are modernising their trade in order to keep it alive (17:35).

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