The Federal Reserve’s belief that recent spikes in inflation were temporary may need to be reconsidered. With another disappointing inflation reading, the possibility of rate cuts being put on hold indefinitely has increased, and there is a growing chance that the Fed won’t be able to make any cuts at all in 2024. The latest US consumer price inflation data has undermined the logic behind expecting rate cuts in the near future. Core CPI is currently hovering just below 4%, which is double the Fed’s target, and this is likely to have a negative impact on the Fed’s preferred inflation gauge, pushing those numbers up and making it challenging for the Fed to reach their 2% goal in the coming months.
