Economic and Policy Perspectives with Dan Varroney | October 29, 2026
The Federal Reserve should give Main Street room to build on America’s growth.
The advance estimate shows real GDP grew at a 3.4% annualized rate in the third quarter, compared with 2.2% in the second. Investment contributed to growth, and real final sales to private domestic purchasers rose at a 4.9% annualized rate. These are quarterly estimates, subject to revision.
September’s household data show a different pressure: real consumer spending increased less than 0.1% from August, while real disposable personal income fell 0.3%. The PCE price index rose 3.6% from a year earlier; excluding food and energy, it rose 3.1%.
For a small-business owner, customers watching every dollar and the cost of financing equipment can affect the same investment decision. A stronger quarter does not mean every family has more money available for its next purchase.
My judgment: hold rates steady in December unless incoming evidence makes a convincing case for changing course. Inflation must come down, and any further increase should be weighed against the productive investment and hiring it could discourage.
Business and association leaders: is financing or customer demand weighing more heavily on your next investment?
Read BEA’s third-quarter GDP advance estimate and September Personal Income and Outlays release, both published October 29, 2026.
Watch the GDP and PCE video on YouTube.
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Music: “News Theme” by Kevin MacLeod (incompetech.com), licensed under CC BY 4.0. Edited excerpts with volume adjustment and fades.