Federal Reserve is likely to scale back plans for rate cuts because of still-elevated inflation
What specific level has inflation reached that has influenced the Federal Reserve's decision to potentially scale back on planned rate cuts?
Inflation has reached a level above the Federal Reserve's 2% target, which has influenced their decision to potentially scale back on planned rate cuts.
How many times does the Federal Reserve now project it will cut its benchmark rate by the end of the year, and how does this compare to their previous projections?
The Federal Reserve now projects it will cut its benchmark rate twice by the end of the year. This is a downgrade from their previous projections in March, when they had envisioned cutting the rate three times.
What were the core inflation rates from April to May, and how do these figures relate to the Fed's decision-making on interest rates?
The core inflation rate, which excludes volatile food and energy costs, rose by 0.2% from April to May. This was a smaller increase than the previous month and marked the smallest monthly rise since October. On a year-over-year basis, core inflation slowed from 3.6% in April to 3.4% in May, the mildest annual pace in three years.
These figures relate to the Fed's decision-making on interest rates as they indicate that inflation is cooling down and moving closer to the Fed's 2% target. This could influence the Federal Reserve to potentially cut interest rates in the future, although it is important to note that the policymakers frequently revise their plans for rate cuts or hikes depending on how economic growth and inflation measures evolve over time.