Powell likely to signal that lower inflation is needed before Fed would cut rates

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — After three straight hotter-than-expected inflation reports, Federal Reserve officials have turned more cautious about the prospect of interest rate cuts this year. The big question, after they end their latest policy meeting Wednesday, will be: Will they still signal rate cuts at all this year? Wall Street traders now envision just a single rate cut this year to the Fed’s benchmark rate, now at a 23-year high of 5.3% after 11 hikes that ended last July. Traders have sharply downgraded their expectations since 2024 began, when they had expected up to six rate cuts. Rate cuts by the Fed would lead, over time, to lower borrowing costs for consumers and businesses, including for mortgages, auto loans and credit cards.