At one point, the Fed held its benchmark lending rate steady for more than a year starting in the summer of 2006. But if the predictions of a March cut bear out, or even a rate cut in May, so much for the Fed’s higher-for-longer strategy. Central bank officials will also release their latest set of economic projections, which will likely reflect inflation cooling faster than previously estimated. But why would the Fed begin to cut rates so soon, if some officials, including Powell himself, have said it’s still way too early? The Fed’s preferred inflation gauge — the Personal Consumption Expenditures price index — rose 3% in October from a year earlier, down from September’s 3.4% rise.

Source: CNN December 10, 2023 13:26 UTC