AI Computing Spending and High-Income Consumption "Dual Engines" Drive Economists to Raise US Q3 GDP Forecast to 2.5%

Driven by AI-related investment and high-income consumer spending, economists have raised their US Q3 GDP growth forecast to 2.5%. With inflation and employment slowing, expectations for the Federal Reserve to hold interest rates steady extend to July next year, while September rate hike expectations have cooled significantly. However, escalating conflict in Iran remains a potential downside risk.