The U.S. economy boasts robust growth and slowing inflation despite the highest interest rates in two decades. Such performance isn’t common globally, especially among other advanced economies, revealing crucial differences in the fundamental factors driving inflation and growth.| www.dallasfed.org
U.S. dollars are hard to find in foreign markets during times of heightened risk, as evidenced by two interesting and related features in the post-2007 international financial landscape.| www.dallasfed.org
When it comes to trading goods with the United States, Mexico would appear a logical sourcing alternative to China. Before the pandemic, increasing friction between the U.S. and China—the top supplier of goods imports to the U.S. in 2019—contributed to an anticipated “nearshoring” shift among companies dependent on Asia.| www.dallasfed.org
As money demand changes, and in particular as money velocity fluctuates with interest rates, this relationship can become unstable with money growth providing limited useful information for inflation forecasting.| www.dallasfed.org