With the U.S. economy surging at a 4.9% rate, the bears seem to be hibernating early, as there’s no immediate sign of weakening in the pillars of robust employment and healthy household spending.

“It was a complete blowout that nobody would have predicted even three months ago,” Olu Sonola, head of U.S. regional economics at Fitch Ratings, tells Fortune. “A tight labor market and a solid consumer balance sheet also mean the economy will be sustained for some time to come.”

While a coordinated global interest rate tightening has slowed economies worldwide, the U.S., despite having higher rates, is defying predictions of contraction.

Last October, models developed by Bloomberg Economics notably estimated the chance of a U.S. recession this year at a staggering 100%, a total certainty in other words. 

Even an emerging crisis in the regional lending market sparked by the failure of Silicon Valley Bank, First Republic and Signature Bank this past spring has failed to make a noticeable dent in growth.

How have so many got it wrong?

Mohammed El-Erian, the chief economic advisor at German insurer Allianz and author of the new book Permacrisis readily admits his profession has been all over the place with their forecasts over the last 15 months.

Analysts like El-Erian criticize the Federal Reserve for blunders that eroded market faith in its ability to navigate economic challenges.

The Fed’s actions, including rapid rate hikes and selling off Treasury holdings, were seen as attempts to cool an overheated economy, but the impact has been slow, prompting questions about the transmission process.

One of the biggest mysteries, according to Deutsche Bank, is why this transmission has been so “exceedingly slow” in the U.S. versus other nations. 

“The absolute level of market rates is not the best metric of how tight policy is,” concluded George Saravelos, who looks at cross-border fund flows as Deutsche Bank’s global head of foreign exchange research. “It is where policy is being passed through the most that matters.”

Paradoxically interest expenses for companies have in fact declined, he says, as the returns on their cash holdings have risen while their liabilities are fixed.

One prime example is Warner Bros. Discovery, whose finance chief boasted his creditors are hurting so much due to the low rates he locked in over nearly 15 years that he could likely buy his bonds back from them at a sizeable discount.

Fixed-rate 30-year mortgages have insulated American homeowners from rapid rate increases, and despite a total household liability of $17.3 trillion, most Americans still possess assets to liquidate in a pinch.

The Fed’s recent report indicating a 37% increase in Americans’ net worth further underscores the country’s economic resilience.

Were it not for recent polls putting Donald Trump ahead in key swing states, one might think Bidenomics with its focus on building the middle out has been a smashing success. 

Pockets of weakness emerging

Importantly last quarter’s pace of 4.9% growth is not sustainable.

For example, Fitch’s Sonola says roughly 1 percentage point of that came from inventory buildup that will ultimately reverse and become a temporary drag on the economy. 

There are also pockets of weakness emerging, particularly among younger consumers and low-income earners who rent and have little or no assets.

The government’s growing interest burden, now estimated by Bloomberg at an annualized $1 trillion, could also curtail future public sector spending.

Still, the worst Sonola expects for next year is a brief and shallow recession followed by an immediate bounce back that will still mean output will expand on an annual basis.

Granted it will be below-trend, somewhere in the region shy of 1%, but still an expansion at a time when China is struggling with a property crash and Germany, Europe’s economic engine, may not grow at all.

A big reason for that is a shortfall of about 3 million more vacancies in the U.S. than existed prior to the pandemic.

Even if the Fed’s tightening measures result in unemployment creeping higher, there’s still plenty of cushion before consumer spending is likely to soften across the board. 

That is, so long as two conditions remain in place: 1) higher immigration remains politically challenging and 2) the baby boomers who exited the workforce during COVID don’t all want to return.

But Sonola views that as an unlikely scenario given many are sitting on a stockpile of assets from which to live comfortably. 

“The real estate market has been good, their stock portfolio is good and they’re collecting social security checks,” Sonola says. “So they have the luxury to play with their grandkids and stop worrying about money.”