Fed mouthpiece Nick Timiraos: Overheating of inflation in March may cause the Fed to overreact

Nick Timiraos, the "Fed mouthpiece," wrote that given the Fed officials' underreaction to the inflation data in January and February, the risk of overheating in March inflation data may be greater. The Fed has tried to avoid making policies based on one or two data points, but the resilience of economic activity so far this year means that the case for a mid-year rate cut depends on whether inflation resumes its steady downward trend since the second half of last year. If inflation is mild in March and April, the Fed may cut interest rates in June. But if inflation is frustrated again in March, it may disrupt the June rate cut plan and postpone the first rate cut to the Fed's July meeting, or even later. (Jinshi)