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Stronger US growth may lead Fed to slow bond buys

A worker at a Chrysler plant in Detroit inspected a chassis.
A worker at a Chrysler plant in Detroit inspected a chassis. Paul Sancya/Associated Press/File

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A stronger-than-expected rise in economic growth last quarter will likely strengthen the hand of Federal Reserve officials who want to slow the Fed’s bond purchases next month.

The economy grew at a 2.5 percent annual rate from April through June, the government estimated Thursday. That was more than twice the growth rate in the first quarter and far above an initial estimate of a 1.7 percent rate for April through June.

The Fed is weighing key measures of the economy’s health before it meets Sept. 17-18 to decide whether to scale back its $85 billion in monthly bond purchases. The Fed’s bond buying has helped keep long-term borrowing rates near record lows. A stronger economy would need less support from the Fed.

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