JP Morgan on the 'stealth stimulus' supporting the US economy even after rapid rate hikes

<p>JP Morgan on the US deficit and how its supporting the economy. Main points from their note:</p><ul><li>The FY23 deficit is tracking about US$1.5 trillion, but only thanks to the odd accounting of student debt forgiveness </li><li>Excluding student debt, the deficit would be closer to $1.8tn, and almost $1tn larger than in FY22</li><li> This widening should partly reverse as we move into FY24, when we project a deficit around $1.6tn </li><li>This year's "stealth stimulus" may help explain the economy's resilience to rapid interest rate hikes</li></ul><p>Has the Federal Open Market Committee (FOMC) done enough now?</p><ul><li><a href="https://www.forexlive.com/news/forexlive-americas-fx-news-wrap-26-jul-fed-raises-rates-by-25-bps-to-55-22-year-high-20230726/" target="_blank" rel="follow" data-article-link="true">Forexlive Americas FX news wrap 26 Jul: Fed raises rates by 25 bps to 5.5%. 22-year high.</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.