Fed seen on hold until September, with rising bets on earlier rate cut

The Federal Reserve may hold interest rates steady at 4.25%-4.50% until September. Recent data shows a 0.4% rise in the producer price index and a drop in jobless claims, indicating a robust labor market despite persistent inflation concerns.

Analysts project personal consumption expenditure inflation to decrease to between 2.6% and 2.7% in January. Fed Chair Jerome Powell emphasizes a cautious approach, advocating for a restrictive monetary policy until clear signs of inflation reduction emerge.