However, even if there has been some improvement in the trade-off between growth and inflation in the US, it is difficult to see how the economy can continue to expand at this rate without something giving somewhere. Signs of strain in the country's current account are already more than apparent.
Financial markets have begun, probably rightly, to worry about an increase in US rates over the coming months. Fears of a US rate rise have been the trigger for many Wall Street corrections in the past, and it seems hard to believe the bulls when they argue that this time round such a move has already been fully discounted. Whether the correction will be anything other than a short-term stumble is less obvious. Many shots have already been fired at the Wall Street bubble. None of them have yet managed to bring the market crashing down to earth.
The more worrying scenario is that a rise in US interest rates, and a consequent slowdown in the world's largest economy, will end up plunging the whole world into recession. The industrialised world has been spared the full impact of the crisis in the emerging markets only thanks to the US's extraordinary propensity to consume. If growth in the US starts to crumble - as is looking increasingly likely - then the whole world will start to feel the pinch.
All this makes the case for stimulating growth in Europe even more compelling. It is time the euro-zone started acting like the world power it so desperately wants to be. Until Europe starts to take up the slack on growth, it is difficult to be anything other than gloomy about global economic prospects.Reuse content