This week’s forthcoming Consumer Price Index report could show easing year-on-year inflation, increasing the potential for Fed interest rate cuts in May or June 2025.

The U.S. economy added a smaller-than-expected tally of new jobs last month, but a sharp jump in wage growth and revisions tied to population changes and immigration make for a noisy report that might not indicate broader strength in the labor market.

The January jobs report revealed a drop in the unemployment rate to 4%, accompanied by payroll gains of 143,000. A Fed interest rate cut in March is now very unlikely.