It is important not to dismiss the productivity boom thesis entirely. Jay Powell, the incumbent, has also highlighted productivity improvements as the rationale for the Fed boosting its growth forecasts for 2026 by half a percentage point to 2.3 per cent in December. Powell said that US productivity growth had been “structurally higher for several years”. It is now improving output per hour far faster than most other advanced economies, where it has stagnated since the pandemic.