Rates Talk Begins after Strong U.S. Growth

A stunning acceleration in second quarter growth and a jump in inflation triggered a new round of speculation that the Fed will have to speed up plans to hike rates.

The faster pace of growth makes it more likely the economy will grow at a better clip in the second half, but strategists do not expect the Fed to change its timeline unless there is a consistent jump in activity. The number is not expected to have any impact on the Fed statement scheduled for 2 p.m. EDT Wednesday.

Second quarter GDP grew at 4 percent, well above the expected 3 percent. Traders focused on the faster pace of inflation at 2.3 percent annual rate, compared with 1.4 percent in the first quarter, as measured by the personal consumption expenditures index. That is above the Fed’s 2 percent target rate.

CNBC

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