In 2024, the US economy experienced a rapid recovery from the COVID-19 lockdown slump, leading to a renewed sense of enthusiasm across the country. The driving force behind this recovery was affluent Americans who invested in government bonds and received higher yields compared to others in the same year.
This trend of affluent Americans driving the economy is likely causing the delay in rate cuts by the Fed. Their success is pivotal in ensuring the stability and growth of the economy. If affluent Americans do not continue to make money, there is a risk of the US economy crashing.
Affluent Americans are benefiting from significant wealth gains in stocks, commodities, and the US dollar. This prosperity serves as a significant tailwind for the growth of the US economy. However, their success is also causing challenges for other segments of society, particularly middle-class Americans who are facing difficulties with rising home values and declining stock prices.
In conclusion, while affluent Americans played a crucial role in driving economic recovery in 2024, their success comes at a cost for other segments of society. It is important for policymakers to consider how to ensure that everyone benefits from economic growth and stability while addressing these challenges faced by certain groups.
