The answer begins with a distinction traders know well: a higher Treasury yield does not describe the whole set of financial conditions. Goldman’s model finds that rising equity prices, narrower credit spreads and a weaker dollar have nearly offset the tightening from higher rates. Taken together, this year’s market moves imply only a 0.1 percentage point hit to 2026 GDP growth.
Takeaways by Dark Side of the Boom™
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Higher rates have met some powerful market offsets.
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Housing is carrying far more of the strain than GDP.
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Oil takes purchasing power, then draws some investment back.
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The remaining surprise sits with the consumer.