US GDP Soars, Sparking Debate on 2026 Rate Cuts

• US Q3 GDP grew by 4.3%, significantly exceeding the 3.2% forecast by Dow Jones economists.
• Strong GDP initially alarmed investors, suggesting the Federal Reserve is less likely to cut interest rates early in 2026, impacting equity prices.
• Experts like Michael Pearce and Gary Schlossberg suggest strong GDP supports the Fed remaining on hold longer, potentially until June.
• Bret Kenwell argues that while GDP is solid, Fed decisions for 2026 will primarily depend on inflation and the labor market, not just headline GDP.
• Chris Rupkey predicts faster rate cuts to neutral in 2026, citing potential pressure from a new Fed chair to align with calls for lower rates.

Why It Matters: Robust US GDP growth in Q3 complicates the outlook for Federal Reserve rate cuts in 2026.