Inflation frustration may prompt Fed to dial back rate-cut outlook

- U.S. central bankers are not expected to cut borrowing costs this week, but their new economic projections may be a wild card, potentially signaling fewer interest rate cuts and a later start to the policy easing than they previously had estimated.

Bets in financial markets also point to an end-of-2025 policy rate in the 3.75%-4.00% range, a quarter of a percentage point lower than Fed policymakers forecast in December. A report last week showing consumer price inflation accelerated to 3.2% in February from 3.1% in the prior month is not going to give Fed policymakers greater confidence that inflation is moving sustainably toward their 2% goal, the bar they set in January for cutting rates."They were hoping for better, clearly ...

Munoz expects the Fed to start cutting rates at every other policy meeting - or once every quarter, which he said implies a likely delay in the start of the policy easing to September if the central bank reduces the number of rate cuts in 2024 to two. Most analysts expect few changes to the Fed's policy statement on Wednesday, but they see more of an emphasis on the need for "careful" adjustments in Fed Chair Jerome Powell's post-meeting press conference and plenty of hedging around the timing of rate cuts.

Another presidential election is on the horizon, and financial advisors are considering the possibility of Donald Trump securing the Republican nomination and winning a second term at the presidency....The former president took aim at former Rep. Liz Cheney and other members of the committee after a new report emerged.

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