After having risen at an annual rate of just 1-1/4 percent in the first quarter, U.S. inflationadjusted gross domestic product (GDP) is currently estimated to have increased at a 3 percent pace in both the second and third quarters despite the disruptions to economic activity in the third quarter caused by the recent hurricanes.
In the face of inflation that continues to be much too high and in light of the recent high readings, the FOMC raised the federal funds rate by 75 basis points at our most recent meeting last week.