When the Federal Reserve’s rate-setting committee sits down Tuesday and Wednesday, one thing it has to grapple with is that underlying inflation is looking cooler than it thought just a few months ago. Another: The economy is looking much stronger.
The central bank’s policy makers will need to update the economic projections to reflect these changes. But an environment with a bit less inflation and more growth has interest-rate implications, too. While policy makers are almost certain to keep rates on hold, and might be comfortable leaving them on hold for the remainder of the year, rate cuts are likely to be even further from their minds now.
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