Recent experience has shown that the United States could not withstand an interest rate normalisation

The Federal Reserve, which wanted to normalise its interest rates, had to lower them rapidly from the autumn of 2018. This reversal of the US Federal Reserve’s interest rate trend shows that the United States currently could not withstand an interest rate normalisation. In late 2018, the normalisation of interest rates actually triggered: A drastic downturn in residential construction; A downturn in share prices, admittedly also driven by protectionist measures against China. The deterioration in US companies’ financial situation and the rise in default risk are often mentioned. Can it be attributed to the rise in interest rates in 2018? That is possible for credit spreads, but does not seem to be the case for defaults. If the US economy is unable to withstand a full interest rate normalisation, it will not take place.