WASHINGTON (AP) - A stronger-than-expected rise in US 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 annualized 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.
Global financial markets have been under pressure over speculation that the Fed will slow its purchases and send interest rates in the United States higher. US rates have already been rising in anticipation of a pullback in Fed bond buying. But the Fed may decide the economy is strengthening enough to withstand higher rates.
Last quarter's faster growth ''should give Fed officials more confidence that the recovery is gathering steam,'' said Paul Ashworth, chief US economist at Capital Economics.
Other analysts think the Fed might decide to maintain the pace of its bond buying to help fuel the economy. They think Fed officials may conclude that the still-subpar US economy could falter under the weight of higher interest rates, a slower housing rebound or a messy resolution to a fight over the federal budget.