Inflation has held below the Federal Reserve’s inflation target of 2%, a stubborn point for central bankers, but remains solid enough. If it were to fall further, however, officials could eventually cut to underscore a commitment to higher inflation.
"If [Fed Chair Jerome Powell] is really serious about low inflation being ‘one of the major challenges of our time’ – either as an economic issue or a political fig leaf – then yes the Fed could cut rates to support inflation,” said Josh Wright, chief economist at iCIMS.