Federal Reserve officials are entering their policy meeting with optimism but uncertainty. Inflation has cooled off, but it remains unclear how much the Fed will ease interest rates. Recent data shows that price pressures have eased, leading to speculation of an interest rate cut. Some economists argue for a larger cut to prevent potential damage to the labor market, while others believe a modest quarter-point cut is sufficient. The battle against inflation continues, with housing costs contributing to stubborn core inflation. Consumer confidence is growing, although economists emphasize the need to closely monitor changing dynamics. There is hope for a soft landing, with predictions of GDP growth and inflation drifting back to the Fed's target. The meeting coincides with the presidential election, with different economic platforms proposed by the candidates. Economists are divided on the inflationary impact of the candidates' policies. The Sahm rule, usually used to mark the start of a recession, may not apply this time. The majority of economists expect a quarter-point cut, and anticipate further cuts in the future. The decision of whether to go big or play it safe remains uncertain.
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