Powell Has Backing for 2025 Rate Cuts and Then Things Get Cloudy

The Federal Reserve is ready to cut interest rates again this month, because right now a weakening job market outweighs inflation fears. But that balance may not hold for very long.

There’s a sizable Fed contingent calling for caution – pointing to prices that have been running above-target for years and still face upward pressures. Even some policymakers who are open to two more rate cuts this year aren’t confident projecting that trajectory any further ahead.

All this means the path for borrowing costs into 2026 is much less clear than the steady downward drift that financial markets are currently ...