US Economy Surges in Q3, But Momentum Wanes Amid Challenges

• US economy grew 4.3% in Q3, surpassing 3.3% forecast and Q2's 3.8%, driven by strong consumer spending.
• Consumer spending, particularly a rush for electric vehicles before tax credit expiry, fueled Q3 growth but proved short-lived.
• Government shutdown delayed data release and is projected by CBO to shave 1-2 percentage points off Q4 growth, with $7B-$14B permanent loss.
• A "K-shaped" economy emerges: high-income consumers thrive, while middle/lower-income households and small businesses struggle with rising costs and tariffs.
• Federal Reserve cut interest rates by 25 basis points to 3.50%-3.75%, but signaled no immediate further cuts due to economic uncertainties.

Why It Matters: US Q3 growth strong, but future momentum threatened by costs, shutdown, and K-shaped recovery.