Hopes for Interest Rate Cuts Fall Amid Persistent Inflation
Summary from the AllSides News Team
Persistently elevated inflation, combined with economic growth, has complicated the Federal Reserve’s plans to cut interest rates this year.
For Context: The Fed has suggested it would cut interest rates multiple times in 2024, easing off of monetary tightening enacted throughout 2023 to rein in inflation. However, year-over-year inflation reached 3.5% in March, up from 3.2% in February.
Coverage from the Left and Center: Media angles on interest rates varied widely. While Business Insider (Lean Left bias) highlighted a JPMorgan strategist who said the Fed “needs to cut interest rates to lower inflation,” a CNN Business (Lean Left bias) analysis suggested the Fed could still raise interest rates. Meanwhile, The Wall Street Journal (Center bias) struck a more pessimistic tone, saying the Fed had been sent “back to an uneasy holding pattern,” and a Washington Post (Lean Left bias) analysis cast the economic data as strange, saying, “The economy still isn’t behaving the way anyone expected.”
Coverage from the Right: Coverage of interest rate speculation was rare in right-rated outlets on Thursday; AllSides could only find recent original coverage of the issue in The National Pulse (Right bias). The Pulse’s article criticized President Joe Biden, although its headline misleadingly framed the president’s “prediction” as a statement of fact. Other right-rated outlets often covered inflation on Thursday, framing it as particularly damaging to both consumers and Biden’s reelection chances.
Featured Coverage of this Story
From the Left
Soft Landing or No Landing? Fed’s Economic Picture Gets Complicated.
America seemed headed for an economic fairy-tale ending in late 2023. The painfully rapid inflation that had kicked off in 2021 appeared to be cooling in earnest, and economic growth had begun to gradually moderate after a series of Federal Reserve interest rate increases.
But 2024 has brought a spate of surprises: The economy is expanding rapidly, job gains are unexpectedly strong and progress on inflation shows signs of stalling. That could add up to a very different conclusion.
Instead of the “soft landing” that many economists thought was underway...
From the Center
Fed Rate Cuts Are Now a Matter of If, Not Just When
Another firmer-than-anticipated inflation report delivered a meaningful setback Wednesday to the Federal Reserve’s hope that it could buoy prospects of a so-called soft landing by dialing back some of the past year’s interest-rate increases.
Solid hiring and the prospect that inflation might settle out closer to 3% than the Fed’s 2% goal could call into question whether the central bank will be able to cut rates until much later in the year without evidence of a sharper slowdown in the economy.
A third straight month in which prices were hotter than...
From the Right
Biden Says Fed Will Cut Interest Rates by Year’s End, Raising Questions About Central Bank’s Independence.
President Joe Biden is standing by his prediction that the Federal Reserve will enact an interest rate cut before the end of the year. The President doubled down on the rate cut prediction despite a Consumer Price Index (CPI) print released on Wednesday suggesting that inflation was reaccelerating.
“Well, I do stand by my prediction that, before the year is out, there’ll be a rate cut,” Biden said during a Wednesday press conference with Japanese Prime Minister Fumio Kishida. The President suggested that the hot CPI report would only delay a rate cut by a month or two.
Biden’s comments raised renewed concerns about...
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