US economy shows growth as Fed raises rates and investment hits $11 trillion

The United States economy is experiencing stable growth near its 2% potential, even as the Federal Reserve unexpectedly raised short-term interest rates from 3.75% to 4%. This move follows 65 consecutive months of core PCE inflation exceeding the 2% target, driven by rising costs for energy, food, and raw materials linked to conflicts in the Persian Gulf.

Meanwhile, a significant productivity gap has emerged between the United States and the European Union, with EU labor productivity lagging by more than 20%. The U.S. is addressing this through aggressive policies including tax relief and deregulation. As of late August 2026, the total value of announced and planned domestic and foreign investment commitments in the U.S. reached $11 trillion, focusing on sectors such as semiconductors, automotive, aerospace, artificial intelligence, and energy.