Economists raise US third quarter growth forecast, Fed expected to remain inactive until July next year According to a report by Golden Finance, economists have raised their forecasts for US economic growth in the third quarter, reflecting an increase in expectations for consumer spending and private investment, including capital expenditures in the AI field. According to the latest monthly survey of economists, it is currently expected that the gross domestic product (GDP) in the third quarter will grow at an annual rate of 2.5%, higher than the previous survey's forecast of 2%. The quarterly GDP forecast as of the end of 2027 has remained almost unchanged, all within a narrow range of 2% -2.2%. Economists have made almost no adjustments to their inflation forecasts until the end of next year. It is expected that the personal consumption expenditure price index excluding food and energy will average 3.2% this year, and then fall back to an average of 2.5% for the whole year of 2027. As the so-called core PCE price indicator shows that inflation is slowing down, economists expect the Federal Reserve to keep interest rates unchanged until the end of July next year. Technology/artificial intelligence related investments are the main factor driving the increase in corporate capital expenditures, with high-income households contributing the majority of consumer spending growth, "said James Knightley, ING's Chief International Economist. According to industry research analysts, the total capital expenditures related to artificial intelligence this year may exceed $1 trillion, and may exceed $1.5 trillion by 2027. In addition, Knightley stated, "The cooling of employment and inflation data, coupled with the market's perception that the new Federal Reserve Chairman Kevin Walsh has a low willingness to raise interest rates, has made market pricing less aggressive. Currently, the probability of a rate hike in September is believed to be less than 50%." The escalation of the Iran war poses a risk to the economic outlook as it could push up oil and consumer prices, while potentially dragging down economic growth. Due to inflation exceeding the Federal Reserve's 2% target, if the supply shock persists for a prolonged period, it will make the work of decision-makers more difficult. Economists have also lowered their forecast for average non farm employment growth this year to 66000 people per month, and expect monthly employment growth to be at a similar level in 2027. (Sina Finance)