US GDP Beats at 3.4%, PCE Hits 3.6% as December Fed Rate Hike Odds Climb

Author: Crypffalo Research · 23:11 29/10/2026

The US economy grew 3.4% in Q3, beating the 3.2% forecast, while September PCE inflation rose to 3.6%. Markets now price a better-than-80% chance of a December Fed hike as Bitcoin recovers to around $81,700.

US GDP Beats at 3.4%, PCE Hits 3.6% as December Fed Rate Hike Odds Climb

The US economy grew at a 3.4% annualized pace in the third quarter, according to the Commerce Department's advance estimate released on Oct 29 at 8:30 a.m. ET. That beat the 3.2% consensus and marked a clear pickup from 2.2% in Q2.

At the same time, the Fed's preferred inflation gauge, the PCE price index, rose 3.6% year over year in September. Bitcoin bounced from roughly $79,600 to around $81,700, up about 1.6% over 24 hours.

Key takeaways

Growth: Q3 GDP rose 3.4% annualized, above the 3.2% forecast, after 2.2% in Q2.
Inflation: September PCE rose 3.6% YoY and core PCE 3.1%, both in line with estimates.
Rates: Markets now price a better-than-80% chance of a Fed hike at the December meeting.
Bitcoin: BTC recovered from about $79,600 to around $81,700 but is still testing weekly resistance near $81,400.
Near-term risk: Roughly $10.9 billion in BTC options expire on Deribit at 08:00 UTC on Oct 30.

Spending and investment drive faster growth

The Bureau of Economic Analysis said consumer spending rose 3.8% and private investment jumped about 19.4% in the quarter. Investment was led by business inventories and information processing equipment.

Real final sales to private domestic purchasers, a gauge of core demand, rose 4.9% from 4.6% in Q2. Exports declined and were the main drag.

The second estimate of Q3 GDP is due on Nov 25, so the 3.4% figure may still be revised.

Q3 GDP and September PCE versus prior period

PCE ticks higher, keeping a December hike in play

September PCE rose 0.5% month over month and 3.6% from a year earlier, up from 3.4% in August. Core PCE, which strips out food and energy, rose 0.3% on the month and 3.1% on the year, up from 3.0%.

The figures matched forecasts, so the surprise was limited. Still, Capital Economics told Yahoo Finance the data confirmed that softer summer inflation readings were not the start of a new trend.

The Fed raised rates in September and paused at its Oct 28 meeting, holding at 3.75%–4% with two dissents in favor of a hike. Analysts at Fifth Third Wealth Advisors and RSM said the new data strengthen the case for another 25 basis point increase in December.

Fed Chair Kevin Warsh said economic activity is expanding at a strong pace and inflation remains elevated.
He gave no explicit December signal, but said financial conditions have tightened without yet being tight.
Alphabet shares fell about 12% at the open after an earnings miss, weighing on tech stocks.

What it means for crypto markets

Bitcoin took the data reasonably well because inflation did not run hotter than expected. Cointelegraph reported BTC reached about $81,547 on Bitstamp after dipping to $79,607, while Ether held near $2,365.

Bull case: Strong growth supports risk appetite; if BTC holds above the $81,400 area into the weekly close, buyers could regain momentum.
Risk case: A December hike would likely lift the dollar and Treasury yields, adding pressure on risk assets including crypto.

Per Cointelegraph, Bitcoin is on track to close October down about 3.3%, despite the month's historically positive record. Analyst Rekt Capital expects choppy trading between weekly levels near $80,400 and $81,400.

What to watch next

Oct 30, 08:00 UTC: about $10.9 billion in BTC options expire on Deribit.
Early November: the October jobs report, a key input before the December Fed meeting.
Nov 25: second Q3 GDP estimate and October PCE data.
Track upcoming releases on our economic calendar and real-time liquidations.

Frequently Asked Questions

Why can strong GDP be bad for crypto?

Fast growth with inflation still elevated gives the Fed a reason to raise rates. Higher rates tend to reduce demand for risk assets such as Bitcoin.

How is PCE different from CPI?

PCE is the Fed's preferred inflation measure, covering a broader basket and updating spending weights more often than CPI. The Fed targets 2% PCE inflation.

When does the Fed meet next?

The next policy meeting is scheduled for December. Markets currently price a better-than-80% chance of a rate hike there.

*This content is for information only and is not financial advice.*

Tags: Macro, GDP, PCE, Fed, Bitcoin

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