Economist Podcasts The Intelligence: Fed reckoning
Mar 21, 2024
Simon Rabinovich, the U.S. editor for the Economist, dives into the unexpected resilience of the American economy amid the Federal Reserve's tightening policies. He discusses how pandemic buffers and low interest rates have helped cushion the impact. The conversation also touches on Vodafone's decline and its strategic overhaul, highlighting lessons from its historical missteps. Finally, Rabinovich explores the challenges of preserving Britain’s historic buildings, advocating for a balance between protection and modernization.
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US Economy's Resilience
- The American economy is confounding expectations by remaining strong despite high interest rates.
- Factors like pandemic savings and low energy prices are contributing to this resilience.
Reasons for US Economic Strength
- Pandemic-era savings and stimulative fiscal policy have buffered the impact of monetary tightening.
- The US's status as an energy exporter has shielded it from price increases.
Misjudging Economic Factors
- Economists underestimated the duration of excess savings and other pandemic-related factors.
- This led to inaccurate predictions about the US economy's trajectory.