Fed's mouthpiece Nick Timiraos: March's overheating inflation may lead to an overreaction from the Fed

ChainCatcher news, Wall Street Journal reporter Nick Timiraos, known as the "Fed's mouthpiece," stated that given the Federal Reserve officials' insufficient response to the inflation data in January and February, the risk of an overreaction to the hot inflation data in March is greater. The Federal Reserve is trying to avoid making policy based on one or two data points, but the resilience of economic activity so far this year means that the justification for rate cuts in mid-year will depend on whether inflation resumes the steady decline trend seen since the second half of last year.

If inflation in March and April is moderate, the Federal Reserve may cut rates in June. However, if inflation falters again in March, it could disrupt the rate cut plans for June and push the timing of the first rate cut to the Fed's July meeting, or even later.