Markets are back to fighting a battle that most participants suggest can never be won.
Investors are betting that the Federal Reserve is likely to implement the first of two rate cuts this fall, even as the central bank has stressed that it's not ready to declare victory in the war against inflation.
The Fed kept its benchmark lending rate at between 5.25% and 5.5%, the highest in more than two decades, following a two-day meeting in Washington. The parley was highlighted by a benign inflation report that showed price pressures in the world's biggest economy eased during May.
Fed Chairman Jerome Powell told reporters in his post-decision news conference that while all the Fed officials who submitted new growth and inflation projections for the June meeting, "most" were unmoved by data showing the slowest monthly price increase in four years and the lowest core reading since 2021.
The Fed's Summary of Economic Projections, which distill those forecasts into what's known as the dot plots, point to only one rate cut this year, compared with the three cuts forecast in March. Officials see modestly faster inflation pressures over the back half of the year.