Adrian Cooper, CEO and chief economist at Oxford Economics, said: Our expectation is that the Fed will start cutting interest rates in the second half of the year, maybe in September. But a lot depends on what happens to underlying inflation, especially relative to wage growth. The rapid rise in expectations of labor inflation over the past few years has surprised the Fed and many central banks. This means that workers are not only looking for wage increases to compensate for higher-than-expected inflation in the past, but also because they believe inflation is likely to remain high. I think the Fed wants to see conclusive evidence that the process of slowing inflation will continue, not only with headline inflation, but also with core inflation returning to 2% before they are really ready to cut rates significantly.