The U.S. economy has fared much better than we had anticipated at this time last year. What seemed like an economy tipping toward recession has instead grown by 2.9% in the last four quarters. The ongoing resiliency of the U.S. economy will be tested in 2024, as real interest rates stay relatively high (relative to the last monetary cycle as well as the longer-run equilibrium rate) and the lags of monetary-policy tightening feed through the economy.