Economics

Aug 11, 2026 Barry Eichengreen

Despite a series of major negative shocks, some of them unprecedented, the US economy continues to grow in line with its estimated long-run potential. Yet given obvious and mounting risks, from debt-financed speculation to geopolitical tensions, the appearance of resilience should not be confused with the real thing.

STEAMBOAT SPRINGS, COLORADO—Exhibiting an apparently limitless ability to shrug off bad news, the US economy continues to motor ahead. Real (inflation-adjusted) GDP grew at a seasonally adjusted annual rate of 2.1% in the first quarter of this year and, according to an advance estimate from the Bureau of Economic Analysis, by 1.5% in the second quarter. Both figures are close to the US Federal Reserve’s own estimate of the economy’s long-run potential growth rate of 2%.