BlockBeats reports that on January 26, Wall Street economists lowered their expectations for a quick further rate cut by the Federal Reserve, with the market expecting action no earlier than July. Senior Wells Fargo economist Sarah House noted: “The longer they wait to cut rates, the higher the threshold for further easing from an economic perspective.”

Although the consensus still holds that rate cuts will eventually happen, some economists are beginning to doubt this. JPMorgan US Chief Economist Michael Feroli forecasts that the Federal Reserve will not change its policy throughout the year. According to him, the next move by the Fed—raising rates—will occur in the second half of 2027.

Diane Swonk, Chief US Economist at HSBC, said in an interview that the Federal Reserve is in a “difficult position.” On one hand, inflation remains persistent. On the other hand, she said, there is no observed income growth that could support the labor market and stimulate the economy.

Lindsey Piegza, Chief Economist at Stifel, pointed out in a client report that there are disagreements within the Fed: some are increasingly concerned about insufficient hiring momentum, while others remain focused on persistent high-price pressures. She noted that at least some Fed officials fear that any further easing could lead to an acceleration of inflation. Former Dallas Fed President Robert Kaplan said in an interview that Fed officials will not want to cut rates again until there is clear evidence of inflation decreasing.