Atlanta Fed GDPNow Q3 growth estimate surges to 5.1% from 4.4%

The GDPNow model from the Federal Reserve Bank of Atlanta has lifted its projection for real GDP growth in the third quarter to an annualised 5.1%, a notable jump from the 4.4% reading on September 10.

Their official statement reads:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2026 is 5.1 percent on September 16, up from 4.4 percent on September 10. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, and the Treasury's Bureau of the Fiscal Service, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real government expenditures growth increased from 3.6 percent and 1.3 percent, respectively, to 4.1 percent and 2.3 percent..

This update arrives at a crucial moment. It indicates the US economy was expanding at a solid clip just as the Federal Open Market Committee prepares its rate decision today, where a quarter-point increase to the target rate is almost universally anticipated. Markets assign roughly a 90% probability to that move.

On its face, robust growth tends to be seen as positive. But from the Fed's perspective, an economy growing at an estimated 5.1% annualised rate, fuelled by rising consumer spending, may also stoke further inflationary pressures.

That provides little reason for the central bank to adopt a supportive policy stance. On the contrary, the growth momentum strengthens the case for the expected rate hike today and is likely to keep officials cautious about offering any signal that the tightening cycle is nearing its end.

The rate decision itself may already be fully priced in. What could move markets more are the Fed's updated economic forecasts, the dot-plot projections and Chair Kevin Warsh's guidance on whether further rate hikes are on the table.

A more hawkish tone would typically push US Treasury yields and the dollar higher, while potentially weighing on equities. A less hawkish message — especially one hinting the Fed might pause after today — would likely have the opposite effect.

Traders should remember that GDPNow is a modelled estimate, not the official GDP release. The figure may shift as fresh data arrives; the next update is due on Thursday.