Morgan Stanley notes a number of one-off factors supporting US growth.
The US economy has been remarkably resilient, even as monetary tightening is working as intended. Labor market catch-up, excess savings, and lower energy prices are boosting the consumer, but a slowdown is still coming. We see the first cut delayed to March 2024, followed by more gradual easing.
Recession fears are turning into fear of re-acceleration: Against the backdrop of the fastest monetary policy tightening in recent history, the US economy has displayed remarkable levels of resilience. Investors have begun to interpret the lack of a clear and persistent slowing in the economic data in recent months as a sign that the economy has been less affected by monetary policy than initially expected.
