Fed Faces Tough Balancing Act on Rates to Curb Inflation Without Causing Recession

• The Fed may have waited too long to raise rates and allowed high inflation, and now risks waiting too long to cut rates and causing a recession.

• Inflation is slowing but the Fed wants more confidence it's on a sustainable downward path before cutting rates.

• The economy still seems strong, with solid job gains and wage growth that could reignite inflation.

• But some see more risk of recession than inflation, if rates stay high and narrow bank profits, prompting layoffs.

• If the Fed waits for clear economic weakness before cutting rates, it may be too late to avoid recession.