If year-on-year total and core CPI consumer inflation rates accelerate, financial markets risk turbulence as investors’ 2025 interest rate cut expectations fall further.

The Federal Reserve might be unable to lower its benchmark lending rate until late in the autumn, market-derived data suggested Friday, as a global selloff in government bond markets suggests extended inflation pressures over the coming months.

Federal Reserve officials at their meeting Dec. 17-18 expected to dial back the pace of interest rate cuts this year in the face of persistently elevated inflation and the threat of widespread tariffs and other potential policy changes.