Goldman Sachs: Why Has the US Economy Been So Resilient to Higher Rates and Higher Oil Prices?

Key Takeaways

• 1.Overall financial conditions have changed little on net since January because higher interest rates have been largely counterbalanced by rising equity prices, narrower credit spreads, and a weaker dollar, causing only a 0.1pp net drag on 2026 GDP growth.
• 2.Higher oil and refined product prices subtract 0.3pp from 2026 growth as consumption drags from purchasing power erosion are partially offset by an uptick in energy capex and rig counts in the second half of the year.
• 3.The perceived resilience of the US economy is less puzzling than it appears: total estimated drags from tighter financial conditions and higher oil sum to roughly 0.4pp, which is very close to the actual 0.3pp downgrade made to 2026 growth forecasts.

Table of Contents

• Why Has the US Economy Been So Resilient to Higher Rates and Higher Oil Prices?

Report data

Exhibit 1: Our Overall Financial Conditions Index and the Implied Impulse to GDP Growth Have Changed Little Since the Start of the Year, as Higher Interest Rates Have Been Offset by Tighter Credit Spreads, Higher Equity Prices, and a Weaker Dollar

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