Strong Savings

After peaking in the early 1970s at 13%, the US personal savings rate steadily declined and bottomed at about 3% in the run up to the housing bust. Subsequently, rates quickly rose to 7% and remained there through early 2020. That rise in savings necessarily depressed GDP growth and interest rates over the last decade. Will we see another rise in the savings rate following Sars-CoV-2? It wouldn’t be surprising.