US GDP exceeds expectations by 4.4%, what signals does the stable inflation release?

The U.S. third-quarter economic data was released today, with core figures generally meeting or exceeding expectations. The actual GDP annualized quarterly rate was finalized at 4.4%, higher than the expected 4.3%, while the core PCE price index annualized quarterly rate was 2.9%, in line with expectations and previous values. This set of data reflects that the U.S. economy still maintains strong growth momentum, while inflation pressures remain stable, which has important implications for future policy directions and risk asset pricing.

Economic Data Overview

Economic Signals Behind the Data

Strong economic growth supported by consumption

The U.S. Q3 real GDP growth rate reached 4.4%, exceeding the market expectation of 4.3%, indicating that the U.S. economy still has sufficient growth momentum. The quarterly personal consumption expenditures rate remains at 3.5%, demonstrating stable consumption support, which is a key driver of the U.S. economy. Against the backdrop of slowing global economic growth, this robust performance of the U.S. economy stands out.

Stable inflation data, room for flexible policy

The core PCE price index remains at 2.9%, fully in line with expectations, with no month-over-month changes. This suggests that inflation pressures have stabilized within a manageable range, providing the Federal Reserve with relatively ample flexibility when formulating monetary policy. Inflation is no longer the primary concern, giving policymakers more room for consideration.

Market Implications Analysis

New variables in Fed policy expectations

A combination of data showing GDP exceeding expectations and stable inflation may influence market expectations of future Fed policies. Strong economic growth could reduce the urgency for the Fed to cut rates further, but stable inflation also does not support rate hikes. This “strong growth, stable inflation” scenario is expected to support a relatively neutral stance from the Fed.

Potential impact on risk assets

Economic growth exceeding expectations is generally favorable for risk assets, as it implies relatively optimistic corporate earnings prospects. Cryptocurrencies, as a type of risk asset, are usually affected by both economic growth expectations and Fed policy outlooks. Strong growth may support risk appetite but could also mean a slowdown in rate cut cycles.

Follow-up Focus

The release of this data set means the market needs to reassess the Fed’s policy path. If the economy continues to grow strongly and inflation remains stable, the Fed may adopt a more cautious policy stance. Additionally, attention should be paid to upcoming employment and consumption data to determine whether this strong growth is sustainable.

Summary

The U.S. Q3 economic data demonstrates the characteristics of “growth exceeding expectations and stable inflation.” GDP reached 4.4%, surpassing expectations and reflecting sufficient growth momentum, while the core PCE index remains stable at 2.9%, indicating inflation pressures are under control. This data combination may prompt the market to reassess Fed policy expectations and impact risk asset pricing, including cryptocurrencies. Continued monitoring of economic data trends is necessary to determine whether this strong growth can be maintained.