Soft Landing or No Landing? Fed’s Economic Picture Gets Complicated.

Mr. Biden said on Wednesday that he stood by his prediction that the Fed would lower interest rates this year — an unusual comment from a president who usually avoids talking about Fed policy out of respect for the central bank’s independence from the White House.

“This may delay it a month or so — I’m not sure of that,” Mr. Biden said.

Many Fed watchers think today’s high rates could persist for considerably longer. Many economists and investors previously expected rate cuts to start in June or July. After this week’s inflation report, investors increasingly see rate cuts starting in September or later.

Blerina Uruci, chief U.S. economist at T. Rowe Price, noted that the longer inflation flatlined, the more it could delay rate cuts: Officials are likely to want to see compelling evidence that progress toward cooler inflation has resumed before cutting borrowing costs.

And as the possibility that the economy is not really landing looms, some economists and officials suggest that the Fed’s next move may even be a rate increase — not a reduction. Michelle Bowman, a Fed governor, has said she continues to see a risk that “we may need to increase the policy rate further should progress on inflation stall or even reverse.”

Ms. Bostjancic thinks further rate increases are unlikely at this point: Most Fed officials are still talking about cuts. Still, the recent data suggest that it may take a long period of steady borrowing costs for the economy to simmer down and for progress toward lower inflation to restart.

“More likely, they’re just going to keep rates at this level for longer,” she said.