What Could Prompt The Fed To Ease Monetary Policy

  • After lowering the federal funds rate by a full percentage point in the second half of 2024, the Federal Reserve has kept interest rates on hold this year, and most observers do not expect it to begin cutting rates until this fall. The principal reason is that the larger-than-anticipated tariff hikes in early April fueled concerns that it could spawn stagflation, in which prices rise as the economy softens.