Inflation data this week could help determine Fed's timetable for rate cuts

abcnews.go.com:

After Federal Reserve officials meet this week, a statement they will issue may suggest that they’ve seen meaningful progress on inflation this year — a prelude to eventual interest rate cuts

WASHINGTON — After Federal Reserve officials meet this week, a statement they will issue may suggest that they’ve seen meaningful progress on inflation this year — a prelude to eventual interest rate cuts.

Yet it's hard to say, because the officials themselves may not know for sure until they begin their meeting. That's because the government's latest snapshot of U.S. inflation will be released Wednesday morning, just before the Fed begins the second day of its policy discussions.

One key issue is a sentence the Fed added to its statement after its last meeting May 1: It said “there has been a lack of further progress" in bringing inflation back to the central bank's 2% target.

Inflation had come in uncomfortably high in the first three months of this year, dimming hopes that it would continue to steadily cool, as it had in the second half of last year.

In April, though, consumer inflation did resume slowing, if only slightly. And if the May inflation report being released Wednesday shows further signs of improvement, it's possible the Fed could drop that sentence from its statement. It would be an encouraging sign that the policymakers may cut their benchmark rate within a few months. Rate cuts would eventually lead to lower costs for mortgages, auto loans and other forms of consumer and business borrowing.

But whether or not the sentence is dropped or altered, most economists think no rate cuts are likely before September at the earliest. Chair Jerome Powell is likely to underscore at a news conference Wednesday that the