Opinion: It is unlikely that inflation will drop to a level sufficient for the Federal Reserve to cut interest rates this year

ChainCatcher news, according to Jinshi data reports, several Wall Street economists have stated that due to the complex calculation methods and key area trends behind the data, policy makers are likely not going to be overly comforted by these numbers.

Stephen Juneau, an economist at Bank of America, said in a report: "In short, the inflation process did not start smoothly in 2025. Our forecast for Personal Consumption Expenditures (PCE) inflation further confirms our view that it is unlikely that inflation will fall enough for the Federal Reserve to cut interest rates this year, especially under circumstances where policy changes push up inflation. Unless economic activity data significantly weakens, we believe that policy rates will remain unchanged before the end of the year."

Although the Federal Reserve also pays attention to CPI and PPI, it believes that PCE price index has final say on matters regarding inflation. Most economists believe that later this month when new PCE data is released it will show at most a steady annualized rate of 2.6%, or even possibly slightly rising further away from Fed's target of 2%.