Next week's global central bank annual meeting: the US economy is not afraid to raise interest rates, ignoring recession expectations

The theme of this year's Jackson Hole Central Bank Annual Meeting, "Reassessing the Effectiveness and Conductivity of Monetary Policy," will speak of the strength the U.S. economy has maintained despite interest rate hikes of more than 5 percentage points, as well as its defiance of numerous recession predictions. Monetary policy may have less impact on the real economy than in past interest rate cycles, both due to legacy problems of low interest rates that prevailed from 2009 to 2022 and structural changes in the economy. Millions of homeowners still hold 30-year mortgages with interest rates below 4%, while businesses are similarly taking advantage of ultra-low interest rates to refinance and extend loan maturities before raising rates. In fact, many of the largest U.S. companies are net interest earners.