US GDP Grows 1.5% in Q2; Core Inflation at 3.3%
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- U.S. GDP grew at a 1.5% annualized rate in the second quarter, a figure AP News characterized as "sluggish"
- June core inflation stood at 3.3%, according to CNBC's coverage of the Q2 data release
- Inflation remained "stubbornly high" per AP News, signaling price pressures had not meaningfully eased alongside the growth slowdown
- Q2 GDP growth "slowed" relative to prior quarters per The New York Times headline, with the outlet dating the reading to Q2 of 2026
Why it matters: With GDP expanding just 1.5% while core inflation sits at 3.3%, the Federal Reserve faces a stagflationary bind: cutting rates to support the slowing economy risks rekindling price growth, while holding rates high to fight 3.3% core inflation could deepen the slowdown. Consumers and borrowers absorb the cost either way through elevated borrowing costs or eroded purchasing power.
