Fed Officials Raise Bar for Rate Cuts, Want Broad Pullback in Inflation Before Easing Policy

• Some Fed officials want to see a broader pullback in inflation, not just in goods, before cutting interest rates. They seem to be raising the bar for rate cuts.

• Policymakers want greater confidence inflation is declining sustainably before cutting rates, which could push out timing of first cut.

• Falling goods inflation has driven recent disinflation, but services inflation slowing more gradually. Officials want to see services inflation slow more.

• Fresh CPI data out Tuesday expected to show inflation below 3% for first time in 3 years, but some metrics show sticky inflation remains high.

• Revisions confirmed recent disinflation progress, but some officials still worried about inflation reaccelerating if policy eased prematurely.