Fed Seen Restarting Rate Cuts in June as Still-Elevated Inflation Slows
The Federal Reserve could restart cuts to short-term borrowing rates in June and follow up with another reduction in September, traders bet on Friday, after data showed inflation edged down in January. The 12-month change in the personal consumption expenditures price index, which the Fed targets at 2%, ticked down to 2.5% last month from 2.6% in December. This modest slowdown could lead to a shift in the Fed's policy priorities, as policymakers weigh the trade-offs between controlling inflation and supporting economic growth.
- As inflation rates begin to ease, what implications will this have for consumer spending habits, which are increasingly influenced by price sensitivity?
- How might the Federal Reserve's response to easing inflation rates impact its long-term goals of full employment, particularly in a labor market where unemployment remains below pre-pandemic levels?