Rates on hold as inflation cools but pressures remain

The Federal Reserve is keeping interest rates steady around 4.25%–4.50%, with officials signaling no imminent policy changes despite earlier expectations for more aggressive cuts. Recent data show headline inflation easing to about 2.4% year-over-year, but core price pressures and rising unemployment highlight a fragile balance for the macroeconomy. Analysts and commentators are watching the Fed’s balance sheet, budget dynamics, and new tools like AI inside the central bank to gauge how long rates will stay elevated. The cluster reflects broad uncertainty over the path of inflation, growth, and monetary policy into 2026.