107365400 1706390935907 Gettyimages 1958536789 Afp 34h2699 Jpeg V Investors are giving up on dreams of imminent rate cuts as inflation remains stubborn, a problem that could prod federal reserve policymakers to keep borrowing costs high for a. Inflation is likely to get worse before it gets better, and the federal reserve will be keeping a close eye on prices and tariffs next year before making its next move on interest rates,.
107367292 1706730995401 Gettyimages 1975721238 M020947 L1t48g83 Jpeg V Investors are giving up on dreams of imminent rate cuts as inflation remains stubborn, a problem that could prod federal reserve policymakers to keep borrowing costs high for a longer period. The u.s. federal reserve may need to keep interest rates steady "for some time" before further cuts are warranted, fed governor michael barr said on tuesday, noting continued inflation above. If large geopolitical shocks lead to surges in supply chain problems and inflation, we may see more instances where the fed needs to raise interest rates to keep inflation under control even as economic conditions worsen. The risks from inflation have risen materially since then, as have the chances that the fed will choose to keep rates higher for longer if inflation continues to rebound.
How The Fed S Inflation Fight And Higher Interest Rates Triggered If large geopolitical shocks lead to surges in supply chain problems and inflation, we may see more instances where the fed needs to raise interest rates to keep inflation under control even as economic conditions worsen. The risks from inflation have risen materially since then, as have the chances that the fed will choose to keep rates higher for longer if inflation continues to rebound. Fed officials wouldn’t be inclined to wait for inflation to officially hit 2 percent to cut interest rates, for fear that they might keep rates restrictive for too long, powell has said. If inflation stays high, then policymakers will leave rates higher for longer. if the economy weakens, or if inflation falls faster than they expect, then they’ll be cutting rates sooner and faster. The committee judges that longer term inflation expectations that are well anchored at 2 percent foster price stability and moderate long term interest rates and enhance the committee's ability to promote maximum employment in the face of significant economic disturbances. According to the latest data available (august 2025), inflation remains significantly above target, at 2.7%. in previous blog posts, i have analyzed these dynamics and their likely origin. in this blog post, my analysis suggests that we may be in a persistent above target inflation regime.
Fed Minutes Stubborn Inflation Could Warrant High For Longer Rate Stance Fed officials wouldn’t be inclined to wait for inflation to officially hit 2 percent to cut interest rates, for fear that they might keep rates restrictive for too long, powell has said. If inflation stays high, then policymakers will leave rates higher for longer. if the economy weakens, or if inflation falls faster than they expect, then they’ll be cutting rates sooner and faster. The committee judges that longer term inflation expectations that are well anchored at 2 percent foster price stability and moderate long term interest rates and enhance the committee's ability to promote maximum employment in the face of significant economic disturbances. According to the latest data available (august 2025), inflation remains significantly above target, at 2.7%. in previous blog posts, i have analyzed these dynamics and their likely origin. in this blog post, my analysis suggests that we may be in a persistent above target inflation regime.
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