Fed Faces Tightrope Walk Between Rate Cuts and Inflation Control

As inflation eases, the Federal Reserve grapples with the timing of interest rate cuts to avoid sparking a recession, balancing economic growth and inflation risks.

• Economists warn the Federal Reserve may delay interest rate cuts too long, risking a recession as inflation nears the 2% target.
• Recent data shows inflation easing but remains a concern, with the Fed aiming for more signs of disinflation before adjusting rates.
• The U.S. economy shows strength with solid GDP growth and a robust job market, but the threat of reigniting inflation looms.
• Investors adjust expectations, anticipating fewer rate cuts in 2024 as the Fed maintains a cautious stance on monetary policy.
• The debate continues on the Fed's next moves, with some predicting rate cuts mid-year, while others foresee a possibility of no cuts in 2024.

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