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Inflation frustration may prompt Fed to dial back rate-cut outlook

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  • 1 min read

U.S. central bankers are not expected to cut borrowing costs this week, but their new economic projections may be a wild card, potentially signaling fewer interest rate cuts and a later start to the policy easing than they previously had estimated. Keeping interest rates at the current high levels for a longer period of time could have big implications for American households and businesses, especially in a presidential election year when the state of the economy is already a central talking point for President Joe Biden and his Republican challenger, Donald Trump. Market bets still point to the Federal Reserve’s June 11-12 meeting as the most likely start for reductions to the central bank’s policy rate, which has been in the 5.25%-5.50% range since last July.

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