Fed's road to rate cuts clears as inflation eases

June 12 - Federal Reserve policymakers have reason to feel more confident that inflation is cooling after a U.S. government report on Wednesday showed consumer prices did not rise at all in May, potentially clearing the way for a start to interest-rate cuts before summer's end.

U.S. central bankers wind up a two-day policy meeting on Wednesday and are universally expected to hold the policy rate in its current 5.25%-5.5% range, where it has been since last July. What's unclear is how much weight Fed policymakers themselves will give the fresh data, published less than a hour before they began a second day of policy deliberations that will conclude before 2 p.m. ET.

To Tim Duy, chief U.S. economist with SGH Macro Advisors, a change to that part of the statement is unlikely"unless they are very confident they are cutting in September."

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