Federal Reserve's Future Actions Remain Uncertain Amid Cooling Inflation

Investors anticipate rate cuts in 2024, but officials warn further tightening could be necessary if economic data warrants it.

Federal Reserve Chair Jerome Powell has indicated that it may be too early to discuss when the central bank may begin to cut interest rates, despite inflation continuing to cool.
Investors are increasingly betting that the Federal Reserve's tightening campaign has come to an end, with many expecting the central bank to begin cutting rates in the middle of next year.
Despite inflation cooling considerably in recent months, it remains up 3.2% compared with the same time a year ago.
Federal Reserve officials have indicated they are not ready to declare the inflation fight is over, and they caution that there could be a further tightening if the economic data warrant it.
The extent of Federal Reserve's future easing will depend on how worried it is about a possible recession and financial market instability.