On Thursday, a series of economic data was released in the United States. Among them, Q2 GDP and core PCE data both exceeded expectations.

After the data was released, the three major US stock indexes had mixed performances at the opening. The Nasdaq and S&P 500 both rose by 0.07%, while the Dow fell by 0.06%. The US dollar index rose briefly and then fell back, currently reporting at 104.39.

Steady economic growth and gradual cooling of inflation.

According to the Bureau of Economic Analysis of the US Department of Commerce's preliminary estimates on Thursday, the annualized growth rate of US GDP in Q2 was 2.8%, higher than the expected 2%, and the previous value was 1.4%.

The second-quarter economic growth rate exceeded expectations, indicating that demand remains strong despite the heavy pressure of rising borrowing costs.

The BEA pointed out that consumer spending, private inventory investment, and non-residential fixed asset investment supported the growth of Q2 GDP.

As the main indicator of consumer activity in the BEA report, the seasonally-adjusted initial value of actual personal consumption expenditures in Q2 recorded 2.3%, higher than the expected 2%, and the previous value was 1.5%.

At the same time, the initial annualized seasonally-adjusted value for the core PCE price index was 2.9%, higher than the expected 2.7%, but far lower than the 3.7% increase in the previous quarter.

In addition, data from the US Department of Labor showed that the number of initial claims for unemployment benefits in the US last week was 0.235 million, lower than the expected 0.238 million, and also lower than the previous value of 0.243 million.

However, the number of continuing claims for unemployment benefits remains high, with about 1.851 million people, but it decreased by about 9,000 from the previous week.

Market analysts believe that although the US economy's pace of growth was steady in Q2, the outlook for the second half of the year remains unclear. The labor market is slowing down, which will affect wage growth.

The savings rate is far below the pre-pandemic average level, and economists estimate that most of the effects of the Fed's earlier interest rate hikes have yet to fully emerge. State and local government revenues are also slowing down, which may weaken fiscal spending.

There are also concerns about potential tariff measures. If former President Trump returns to the White House in the November presidential election, companies may advance their imports to avoid the negative effects of potential tariff policies.

However, it is still expected that the US economy will not experience a recession this year, and monetary policy is expected to ease.

Will the Fed cut interest rates in September?

At present, the market is focusing on the timing of the Fed's interest rate cuts.

Steady inflation reduction and steady economic growth are good news for Fed officials.

In the past year, the Fed has maintained its benchmark overnight interest rate in the current range of 5.25%-5.50%. Since 2022, it has raised the policy rate by 525 basis points.

Currently, the market expects three rate cuts this year, starting in September.

According to the CME's "FedWatch" tool, the probability of a rate cut in July is less than 10%, while the probability of a rate cut in September is 89.6%.

Neil Dutta, head of Renaissance Macro economic research, pointed out that today's data will strengthen the Fed's view of having time advantage.

"In the Fed's view, there is no need to rush, because private demand is growing at a steady pace in the second quarter. The July meeting is still a prelude to the September meeting."