Fed Signals Delay, Rate Cuts Pushed Back as War-Driven Inflation Surges

Amid ongoing pressure from rising prices, the Federal Reserve is now expected to delay interest rate cuts for at least six months, according to a Reuters poll conducted April 17–21. The shift comes as the nearly two-month Middle East war drives fuel costs higher, weakens consumer confidence, and reverses earlier expectations for quicker easing. A slim majority of 56 out of 103 economists now expect rates to stay at 3.50%–3.75% through September, compared to nearly 70% who previously anticipated a cut. Despite this delay, 71 economists still expect at least one rate cut this year, though nearly one-third now see no change at all. Inflation forecasts have risen, with the Fed’s preferred gauge projected at 3.7%, 3.4%, and 3.2% across the next three quarters, well above the 2% target. Unemployment is expected at 4.3%, while economic growth remains around 2%.