The Fed may be two meetings away from a policy mistake

The US inflation rate has dropped from 9% to 3%, indicating a potential for the Federal Reserve to cut interest rates during the Federal Open Market Committee meeting next week. However, the Fed's current mindset means it is more likely to signal its intention to lower rates during the FOMC meeting on September 17-18. The Fed's hesitancy to cut rates is due to its lack of confidence that inflation will continue to decline to the 2% target, which could cause undue damage to employment and the economy.