In recent weeks, the Federal Reserve had appeared optimistic about lowering interest rates in the spring. However, these hopes have since dissipated. Despite the efforts of central bankers to ease economic pressure through lower borrowing costs, inflation has returned with a vengeance. Economists are concerned that the main drivers of price increases are becoming increasingly difficult to tackle.
As a result, forecasters now expect fewer rate cuts, likely towards the end of the year. This puts the Federal Reserve right in the middle of a contentious election season, which could spark a political controversy that central bankers typically try to avoid. Despite these challenges, it remains to be seen what course of action the Fed will ultimately take.
