What the Fed's economic projections show (but its rate projections do not, yet) is that the outlook has changed a lot in just three months, and the bar for cuts has gone up. Not only did officials revise up their core PCE inflation forecast by three tenths (for the second straight time -- they went from 2.2% in Sept to 2.5% in Dec to 2.8% in March for year-end 2025), but a few officials also nudged up their forecasts for 2026 and even 2027. Also, 18 of 19 officials have inflation risks to the upside. The labor market will likely need to weaken to get cuts from here. Powell suggested the inflation forecast changes were almost entirely due to trade policy changes. ("We now have inflation coming in from an exogenous source.") I spoke to two former Fed officials who were there for the 2019 trade tensions and the 2021 pandemic inflation who think they will have a hard time looking through price resets due to tariffs. “You’re basically saying, ‘Look, we have a potential inflation problem here. We’re going to be focused on that, and when we get more evidence about what’s happening on the growth side, we’re willing to react at that point—and not before.' No one would like to have to do it that way. But it may be that in this environment, that’s what they’re going to have to do.” https://www.wsj.com/economy/central-banking/fed-forecast-inflation-tariffs-trump-economy-5a5098a1?st=zsEuTB&reflink=desktopwebshare_permalink