Highlights

• Equities ended lower in the third quarter (Q3), as persistent inflation and high interest rates took a toll on near-term growth and earnings.


• Economic growth likely accelerated in Q3, according to the Federal Reserve Bank of Atlanta’s GDPNow estimate, despite the Federal Reserve (the Fed) keeping rates high. Consumer demand weakened but remained stable, supported by a tight labor market and excess savings.


• Headline U.S. inflation rose from 3% in June to 3.7% in August, year over year (YoY), remaining well above the Fed’s 2% target. The Fed raised interest rates by 25 basis points (bps) in July and kept rates unchanged in September but will likely keep rates higher for longer while remaining laser-focused on bringing inflation down to its 2% target.