The market expects the U.S. economy to continue to grow strongly in the third quarter, while inflation is close to or even below the Fed's 2% target.

Odaily Odaily News According to market forecasts, data released by the U.S. Department of Commerce on Wednesday will show that the gross domestic product (GDP) in the third quarter grew at a strong annualized rate of 3% after seasonal adjustment and inflation adjustment, unchanged from the previous value. If this expectation comes true, it will mark the 10th consecutive quarter of expansion of the U.S. economy. At the same time, the market also expects the report to show that the core PCE price index in the third quarter will slow sharply from the previous value of 2.8% to 2.1%, close to the Fed's 2% inflation target. The Fed uses the PCE price index included in the GDP estimate as its main inflation indicator. Another driving factor for the Fed's policy rate cuts is inflation, and the core PCE price index in the second quarter is likely to get closer and closer to the Fed's target. Citigroup expects the U.S. GDP growth rate to be lower than expected, at only 2.6%, but expects the inflation indicator for the quarter to reach the 2% target, a figure that may help consolidate the Fed officials' decision to only cut interest rates by 25 basis points next week. (Jinshi)