Record US growth a boost to recovery hopes

THE 20-year high in the growth of the US economy in the third quarter of this year suggests the debate about economic recovery is drawing to a close.

The US Federal Reserve recently said it believed there was more resilience in the US economy than was the case. However, it also said it could keep interest rates at a 45-year low to ensure the signs of recovery in the US economic data are sustained.

The Fed has also moved away from its previous view that the risks were predominantly weighted towards disinflation to a view that the risks of a fall in inflation are now almost equal to that of a rise.