The U.S. economy grew 1.5% in the second quarter, less than expected, according to new data released by the Commerce Department's Bureau of Economic Analysis.
The figure stood below the estimates of analysts surveyed by Reuters, who previewed the figure would stand at 2.1%. Figures given ranged between 0.8% and 2.9%.
The outlet noted that the survey was conducted before the release of June's advance economic indicator, which showed a slight contraction in the goods trade deficit. Some economists cut their estimates based on the figure.
Consumer spending, however, remained resilient. The indicator represents over two-thirds of the U.S. economic activity and bounced back in the second quarter, clocking in at 3.2% after slowing to 0.5% in the first quarter. As well as tax refunds, higher-income households boosted the figure.
The Federal Reserve left interest rates unchanged unchanged on Wednesday, with officials noting in their statement that "economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East." They added that job growth has "kept pace with the workforce and the unemployment rate has changed little."
Another report detailed that the personal consumption expenditures price index, the Fed's primary forecasting tool, fell a seasonally-adjusted 0.1% in June, in line with forecasts. The core PCE, which excludes more volatile components like food and energy, gained 0.1%, less than expected, and clocked in at 3.3%.
U.S. Treasury yields remain near recent highs Thursday as investors digest the interest rate decision.
The benchmark 30-year Treasury yield remained close to levels last seen in 2007 after the Federal Open Market Committee voted to leave its benchmark federal funds rate unchanged at 3.5% to 3.75%. The decision marked the second policy meeting under Fed Chair Kevin Warsh and reflected the central bank's view that the economy continues to expand despite lingering geopolitical and inflation risks, the Federal Reserve said in its post-meeting statement.
Bond markets, however, signaled that investors remain less certain about the path back to the central bank's inflation target. Longer-dated Treasury yields continued to trade well above shorter-term rates, extending a recent steepening of the yield curve as traders demanded higher compensation for holding long-term government debt, CNBC reported. Market participants have increasingly focused on whether persistent fiscal borrowing, resilient economic growth and inflation risks will keep long-term yields elevated even if the Fed moves cautiously on short-term rates.
