In recent months, the Federal Reserve had appeared poised to lower interest rates during the upcoming spring. However, those prospects now seem to have waned. As of the beginning of the year, central bankers’ hopes of easing economic pressure through reduced borrowing costs have dwindled. The resurgence of inflation is a major concern among economists, as they worry that the main drivers of increasing prices are becoming increasingly difficult to tackle.
These developments have led forecasters to anticipate fewer rate cuts, likely towards the end of the year. This puts the Federal Reserve in a difficult position, as it may find itself at odds with a contentious election season. Central bankers typically strive to avoid political controversies and this could be one such situation.