The U.S. economy grew faster than expected and inflation fell, leaving interest rate cuts unaffected

On July 25th, institutional analysts believe that the U.S. economy grew faster than expected in the second quarter, but inflation has fallen back, and the Federal Reserve's expectations for interest rate cuts in September are not affected. The U.S. GDP data for the second quarter released on Thursday rose by 2.8%. Economists polled by Reuters had predicted that GDP would grow at a rate of 2.0%. The growth rate is expected to be between 1.1% and 3.4%. Despite the Federal Reserve's sharp interest rate hikes in 2022 and 2023, the U.S. economy is still outperforming its global counterparts. Although the unemployment rate has risen to a two-and-a-half-year high of 4.1%, the U.S. economy is still supported by the resilience of the labor market. Core PCE grew by 2.9% in the second quarter after surging 3.7% in Quarter 1, which is good news for the Federal Reserve next week.