The Economy Does Not Need More Rate Cuts
The latest economic data suggests that the Federal Reserve should halt any further rate cuts. Growth remains resilient, inflation is sticky, and the labor market shows unexpected vigor, all pointing to the need for a more cautious approach.
The economy expanded at a solid 2.8 percent annual rate in the third quarter of 2024, based on the Commerce Department’s initial GDP estimate. Growth could have been even stronger if not for the lingering impact of a potential port workers’ strike, which likely inflated import numbers temporarily. Trade and inventory fluctuations shaved 0.8 percent off the headline growth figure and could reverse in the coming months, adding further strength to economic momentum.
Consumer spending, a key driver of GDP, continues to surprise on the upside. Expenditures increased at a 3.7 percent annual pace—the…
