Most of the data on the US economy is still stronger than expected, indicating that, despite significant monetary tightening by Federal Reserve Bank (FRS)the path of recovery is still ongoing and the forecasts of some investors about a possible recession in the second half of the year may be refuted.

It is significant that the category of retail sales, which excludes automobiles, natural gas, building materials and catering services (benchmark retail sales), which the National Statistical Office uses to estimate real consumer spending in the national accounts, unexpectedly rose in April, marking a monthly rate up 0.7% after declining 0.4% in March. The National Association of Home Builders (NAHB) housing market index remained on an upward trajectory in May for the fifth consecutive month (+5 points, to 50), indicating that the housing market may be starting to stabilize after mortgage rates eased slightly compared to the previous month. the highest level in about two decades in November 2022, while after two months of flatness, industrial production recovered in April to a higher-than-expected 0.5% m/m, mainly due to strong production growth. . Signaling optimism about the immediate outlook for the US economy, the Atlanta Fed has revised up its second-quarter annual GDP growth estimate to 2.9 percent from a previous estimate of 2.6 percent, after rising 1.1 percent in the first quarter of 2018. year.

Encouraging US economic data, new “aggressive” statements from the Fed that inflation, despite the retreat of recent months, remains well above the bank’s target, and optimism, following the corresponding statements by US officials, regarding a possible agreement on increasing the government debt limit in the coming days began to raise questions from investors about whether – as the bank hinted in its official statement at the last monetary policy meeting on May 3 – the cycle of raising US interest rates has really closed. .

* Department of Financial Analysis and Research of International Capital Markets of Eurobank.