The Federal Reserve is set to announce a decision on Wednesday about whether to adjust its benchmark interest rate, just days after new government data showed that the economy is cooling off.
The slowdown has coincided with a months-long stretch of stubborn inflation, putting pressure on the Fed to keep interest rates high despite a risk of hindering economic activity with expensive borrowing costs.
Economists widely expect the Fed to leave interest rates unchanged. Such a move would push back rate cuts that the central bank expects to make some time this year.
At its most recent meeting, in March, the Fed stuck to its previous projection of three rate cuts by the end of 2024, even as it opted to hold interest rates steady for the fifth consecutive time.
That approach has amounted to a prolonged pause of the aggressive rate hiking cycle that began roughly two years ago when the central bank sought to rein in rapid price increases.
Inflation has fallen significantly from a peak of 9.1% but it remains more than a percentage point higher than the Fed’s target rate of 2%.
