U.S. Economy Defies Expectations with Strong 5% Growth Despite Fed Rate Hikes

The US economy grew an annualized rate of 5% last quarter despite aggressive Fed interest rate hikes intended to slow growth and curb inflation. This defied expectations.

Many consumers locked in low mortgage and loan rates, insulating them from rate hikes. This limited the Fed's power.

Strong consumer balance sheets, low unemployment, and higher wages fueled spending, the main GDP growth driver.

Businesses invested in productivity-boosting tech, reducing turnover, also lifting output.

Inventory buildup contributed significantly to growth, but may subtract from future GDP, signaling unsustainable growth.