US GDP Accelerates to 3.4% in Third Quarter as Fed Holds Rates Steady

U.S. economic growth accelerated to an annualized rate of 3.4% in the third quarter ending September, up from 2.2% in the prior quarter and 2.5% in the first three months of the year, Commerce Department data released Thursday showed. The stronger print, aided by surging corporate spending on artificial intelligence infrastructure, came as the Federal Reserve held interest rates unchanged on Wednesday. Fed Chair Kevin Warsh said economic activity "is expanding at a strong pace" and reiterated the central bank's commitment to bringing down inflation, which rose 3.7% year-over-year in September—more than a percentage point above the Fed's 2% target. The Fed raised rates by a quarter point last month, its first hike in three years. Rising Treasury yields, driven by inflation fears, have pushed up borrowing costs on credit cards and mortgages. Markets price roughly an 85% chance of another quarter-point hike at the Fed's December meeting, according to CME Group's FedWatch Tool.