U.S. Q3 GDP and September PCE Loom After Fed Hold

The U.S. Bureau of Economic Analysis is scheduled to release its initial third-quarter GDP estimate and September PCE data simultaneously at 8:30 p.m. Beijing time. The releases follow the Federal Reserve’s decision to keep its federal funds target range unchanged at 3.75%-4.00%. Markets expect annualized real GDP growth to accelerate to 3.2% in the third quarter from 2.2% in the second quarter. Consumer spending is expected to rise at a 3.5% annualized pace, while some economists estimate overall business investment could increase by nearly 10%, supported by spending on AI-related data centers, chips and network equipment. September headline PCE is expected to rise 0.5% month on month, with annual growth rebounding from 3.4% to 3.6%-3.7%. Core PCE is expected to rise 0.3% month on month, with annual growth edging up from 3.0% to 3.1%. The source says GDP above 3.2% and core PCE above 3.1% could revive December tightening expectations. After the Fed decision, futures markets put the probability of a December increase to a 4.00%-4.25% range at 85%-86%, up from about 78% before the decision. Two-year Treasury yields were near 4.78%, while the 10-year Treasury yield had broken above 5.03%. Spot gold was trading near $4,050 per ounce, with $4,000 and $4,100 cited as levels tied to the inflation and yield outlook.