Fed Faces Tough Decision on Interest Rates Amid Election Pressures and Shifting Inflation

• The new consensus is that the Fed will cut rates at the September meeting, though some question if there will be any cuts at all due to persisting inflation.

• There is an unofficial July deadline for rate cuts due to cooling inflation late last year that is currently keeping CPI down; hotter inflation recently challenges this.

• The Fed wants to avoid appearing political ahead of November's election, but is facing pressure from both parties.

• Analysts have recalibrated expectations, with Bank of America now expecting one cut in December, or possibly June then a long hold.

• The Fed may see a path to cut rates in June to make policy slightly less restrictive, meeting the July deadline.