How Inflation Has Changed: Timeline

“The signal that we’re taking is that it’s likely to take longer for us to gain confidence that we are on a sustainable path down to 2 percent inflation,” Mr. Powell said in May, after price increases had stalled for months. Inflation has recently cooled again, and policymakers are waiting to see if the trend lasts.

The question now is just how much continued progress on lowering inflation Fed officials will need to see to feel comfortable lowering interest rates.

Investors still think it is possible that the central bank will cut rates in September, based on market pricing. Fed officials themselves predicted one reduction this year and four in 2025, as of their June economic forecasts.

For politicians, that means that the November election will almost certainly happen against a backdrop of high interest rates that are making car leases, credit card borrowing and new mortgages pricey for consumers.

After years of elevated inflation, Americans are also still seeing much higher price levels at the grocery store, on car repair bills and at hotels than before the pandemic.

Price increases have slowed, but getting used to new price levels could take time for consumers.