The Economy is Not What The Fed Expected

The Federal Reserve faces a challenge as it meets to assess economic projections, with inflation proving less predictable than anticipated and an unpredictably robust economy. Their previous forecasts, especially for core inflation, now appear overly optimistic. Despite these uncertainties, rate cuts seem increasingly unlikely, suggesting the Fed may have misjudged the economic landscape. While they are unlikely to increase rates in the upcoming meeting, the unexpected strength of the economy could further disrupt their previous plans for rate reductions next year.