'Upside' inflation risks keep Fed officials wary of turn to rate cuts

Posted: Apr 07, 2024

- Federal Reserve officials are cautious about cutting interest rates due to potential upside risks in inflation - Governor Michelle Bowman warned that if price pressures do not abate, the central bank may need to raise rates - Dallas Fed President Lorie Logan also believes it is too soon to consider rate cuts, citing uncertainty in the economy - Strong job market data and limited progress on inflation have led officials to be patient in deciding on rate cuts - Investors are scaling back expectations of rate cuts, with little chance at the May FOMC meeting and uncertainty for June - Fed policymakers expect three rate cuts this year but are less convinced compared to their previous forecast - Key determinant for future policy decisions will be consumer price inflation, with upcoming CPI report being closely watched - JP Morgan's Chief U.S. Economist has pushed back his call for the first Fed cut from June to July





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