Fed is set to leave interest rates unchanged while facing speculation about eventual rate cuts

By CHRISTOPHER RUGABER
AP Economics Reporter

WASHINGTON (AP) — With inflation edging closer to the Federal Reserve’s 2% target, its policymakers are facing — and in some cases fueling — hopes that they will make a decisive shift in policy and cut interest rates next year, possibly as soon as spring. Such a move would reduce borrowing costs across the economy, making mortgages, auto loans and business borrowing less expensive. Fed Chair Jerome Powell, though, has recently downplayed the idea that rate reductions are nearing. With the central bank poised to keep its key short-term rate unchanged when it meets this week, Powell hasn’t yet signaled that the Fed is done with its hikes.