Fed Holds as Growth Accelerates and Inflation Slows

The U.S. economy entered a rare configuration in July, one that would have made late 1990s Fed Chair Alan Greenspan nod with recognition. GDP grew 1.9% quarter-over-quarter in Q2, the unemployment rate slipped to 4.1%, and CPI rose just 0.07% month-over-month. The Federal Reserve held the fed funds rate steady at 3.63%, choosing patience over pressure as growth and inflation both moved in directions that complicate the policy calculus.

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Key Takeaways Q2 2026 GDP increased 1.9% quarter-over-quarter, accelerating from the 1.5% pace in Q1. The unemployment rate fell to 4.1% in July, its lowest level since early 202…