The threshold for interest rate cuts by the Federal Reserve has been raised, and inflation expectations have been raised twice in a row

Odaily Planet Daily News: Nick Timiraos, the spokesperson for the Federal Reserve, stated in an article that the Fed's economic expectations have undergone significant changes, but interest rate expectations have not fully reflected this change, and the threshold for interest rate cuts is increasing. Federal Reserve officials have raised their core PCE inflation expectations twice in a row, from 2.2% in September 2023 to 2.5% in December 2023, and then to 2.8% in March 2024 (forecast by the end of 2025). Some officials have even raised their inflation expectations for 2026 and 2027. In addition, 18 out of 19 officials believe that inflation risks are biased towards an upward trend, which means that the Federal Reserve may need to see a significant weakening in the labor market before considering a rate cut. Federal Reserve Chairman Powell stated that the increase in inflation expectations is "almost entirely" driven by changes in trade policy. Former Federal Reserve officials believe that the Fed may find it difficult to ignore price pressures caused by tariffs, and they may need to wait until more evidence of slowing economic growth emerges before taking action.