Policymakers at the Federal Reserve sought to rein in expectations that rate cuts are around the corner, saying in a series of interviews and speeches this week that victory over inflation has yet to be won. Atlanta Fed President Raphael Bostic told CNBC on Wednesday that he foresees only one rate cut this year, and not until the fourth quarter, if the US economy continues to display robust growth, low unemployment, and a slow drop in inflation. Chair Jay Powell said the Fed was "not yet done" in taming inflation but noted that conditions would likely still allow for rate cuts. On Tuesday, Cleveland Fed President Loretta Mester indicated that while three cuts in 2024 remained a reasonable forecast, a May cut appeared unlikely.

Fresh economic data over the last week have reinforced views of firm inflation and a resilient economy. The personal consumption expenditures (PCE) price index was up 2.5% year-over-year in February, compared with 2.4% in January, according to figures released last Friday. ADP's payrolls report on Wednesday showed that private-sector employment expanded by 184,000 jobs, above expectations and the largest monthly rise since July. The Labor Department will publish its monthly jobs report on Friday, and economists forecast that March brought 200,000 new jobs, down from 275,000 the month before. In a new post on The Bond Blog, PGIM Fixed Income assesses the US economy's resilience against higher interest rates and whether it is likely to continue.