Wishful Thinking On Wall Street
Yet with price inflation showing strong upwards pressure, I have difficulty seeing how the Fed could cut rates. Not that I buy into the myth of the Fed as "inflation fighter", but it will be difficult for the Fed to retain that myth if they cut rates in the face of rising price inflation. Since the Fed values that myth so much, they will be unable to cut rates anytime soon.
Update: I see blogger Calculated Risk have a great summary how the Fed in its statements is slowly recognizing how the U.S. economy is becoming more stagflationary, just as I have been saying all along, with both the risk to growth and inflation being greater than in previous statements.