Key Takeaways Federal Reserve officials are widely expected to cut the central bank's key interest rate next week even as some measures of inflation are still well above the Fed's goal of a 2% annual rate.

The Federal Reserve will probably cut rates next week, but it remains to be seen how much further rates can drop given the macroeconomic context and the prospect for further inflationary policies from the Trump administration.

Americans still expect sticky inflation in the coming years. Economists and market commentators across the board expect the Federal Reserve to lower interest rates by 25 basis points on December 18, yet it’s difficult to decipher whether recent economic data justify the move.