US economy grew much faster than expected in second quarter

(NEW YORK) — The U.S. economy grew much faster than expected over three months ending in June, accelerating from the previous quarter and defying concerns about a possible slowdown.

U.S. GDP grew at a 2.8% annualized rate over three months ending in September. That figure doubled the annualized rate of growth undertaken over the previous quarter.

The fresh data could complicate the path toward a widely expect interest rate cut from the Federal Reserve in September. Until the most recent quarter, the economy had been cooling.

Price increases have slowed significantly from a peak of more than 9%, though inflation remains more than a percentage point higher than the Fed’s target rate of 2%. An outright drop in prices in June compared to the month prior marked a major sign of progress in slowing inflation.

If the Fed cuts interest rates as the economy is heating up, however, the central bank risks rekindling rapid price increases.

The chances of an interest rate cut at the Fed’s meeting in September stand at more than 80%, according to the CME FedWatch Tool, a measure of market sentiment.