Fed's Kugler May Cut Rate-Cut Outlook on Inflation

Federal Reserve Governor Adriana Kugler signaled she may further reduce her projections for interest rate cuts this year, citing inflation progress that has become 'less favorable' in recent months. The shift reflects a broader recalibration inside the Fed as policymakers reassess the pace of disinflation and the timeline for easing monetary policy. Kugler's comments add to a growing body of Fed communication suggesting the committee is in no rush to resume cutting rates, with officials increasingly sensitive to any stalling in the downward path of inflation. The practical consequence is a higher-for-longer rate environment that continues to pressure borrowing costs for businesses and consumers alike. Markets tracking Fed rate expectations will likely treat this as a further signal that the first cut of 2025, if it materializes, is being pushed out. Investors and analysts should watch upcoming inflation prints and Fed meeting minutes for any shift in the committee's median rate projections.