US Economy Slows to 1.5% Growth in Q2 as Fed Holds Firm on Interest Rates

The US economy grew at a slower pace in the second quarter of this year, expanding by just 1.5%, according to data released by the Commerce Department on Thursday.

This marks a decrease from the first quarter's growth rate of 2.1% and falls short of expectations. The decline was largely driven by lower government spending, investments, and exports.

However, consumer spending remained strong, with the bulk of the growth attributed to this sector. White House Economic Council Director Kevin Hassett downplayed concerns about the GDP figure, stating that it's not a 'half-full glass' but rather 'a full glass.'

The data also revealed that the Personal Consumption Expenditures Price Index (PCE), the Federal Reserve's preferred measure of inflation, rose 3.7% over the past 12 months, with core PCE coming in at 3.3%. This is well above the Fed's target rate of 2%, but did show a slight improvement from the previous month.

Despite this, Federal Reserve Chairman Kevin Warsh stated that he and his colleagues are in no rush to cut interest rates. He emphasized their commitment to stabilizing prices, saying 'five-plus years of inflation above target cannot be cured in nine weeks or by a single month of modest price decreases.'