Federal Reserve Chair Waller's "not too hot" assessment is questioned as both the economy and inflation heat up

The latest economic data from the United States is challenging Federal Reserve Chairman Waller's assessment that the economy is not yet overheating, as the market continues to bet on a rate hike in December, putting the Fed in a more complex position. Strong consumer spending and business investment have driven economic growth beyond expectations, while persistent inflation complicates the Fed's choices between sustaining growth and controlling prices.

Data released by the U.S. Department of Commerce shows that the real Gross Domestic Product (GDP) grew at an annualized quarterly rate of 3.4% in the third quarter, exceeding market expectations. During the same period, consumer spending increased by 3.8%, and business equipment investment surged by 20.9%.

Just a day before the data was released, Waller stated that he does not believe the U.S. economy is running hot and does not want to hinder economic expansion through excessive tightening of monetary policy. However, the latest data indicates that even as the market expects the Fed to continue raising rates, there has not been a noticeable slowdown in U.S. economic activity.