The Fed held at 3.75% to 4.00% with two dissenters wanting a hike, while Q3 GDP beat at 3.4%. September told a different story: flat real consumer spending and headline PCE inflation of 3.6%, which keeps a December hike in play.
Economist Vance Ginn notes Q3 private demand accelerated even as headline GDP was lifted by inventories, with Census data showing data-center construction near an $85 billion SAAR record. Source
The FOMC held the federal funds target at 3.75% to 4.00% on Wednesday in a 10-2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a second consecutive quarter-point hike. A day later, the Bureau of Economic Analysis (BEA) put third-quarter real GDP at 3.4% annualized, against a 3.2% consensus and up from 2.2% in Q2. Averaged over the quarter, the economy looks strong and prices look tame. September's exit rates say the opposite, and the committee is reading the exit.
