WASHINGTON- US central bank officials will conclude their latest two-day policy meeting on Wednesday with a new statement and comments from Federal Reserve Chair Jerome Powell that could give a clearer sense of how recent disappointing inflation readings have changed the expectation for interest rate cuts this year.
The Fed is almost certain to hold its benchmark overnight interest rate steady, with investors placing nearly a 100 percent probability on that outcome and no support for any changes to the policy rate offered by officials ahead of the meeting.
But a new policy statement and Powell’s press conference half an hour later should provide insight into how deeply — if at all — a stretch of three lost months in the inflation battle has affected the likelihood that borrowing costs will fall any time soon.
Fed policymakers will not be updating their quarterly economic projections at this week’s meeting, so any fresh guidance rests on the statement and Powell’s press conference.
The Fed made significant headway in lowering inflation back to its 2 percent target after it had surged to a 40-year high in 2022.
But progress has stalled this year, and even threatened to reverse, pushing central bank officials to downplay when rate cuts might begin.
As the latest Fed meeting began on Tuesday, two sets of data further undermined the outlook.
