Potentially limiting the Federal Reserve's ability to cut rates is the growing view that the economy's so-called neutral rate — a theoretical level of borrowing costs that neither stimulates nor slows growth — is much higher than policymakers are currently projecting. 

Federal Reserve Bank of Richmond President Thomas Barkin said he needs further clarity on the path of inflation before lowering interest rates

The Federal Reserve held firm on its current interest rate levels after its latest meeting, but inflation numbers are leading to talk of potential action in third and fourth quarters.

Forty-four percent of respondents said they expect Trump to seek to to politicize the central bank or limit its power if he returns to the White House. Overall, they put a probability of 40% on the Fed losing its autonomy under a second Trump administration. 

Beth Hammack, who stepped down as the bank's co-head of global finance earlier this year, will take the helm as President of the Federal Reserve Bank of Cleveland later this summer following the retirement of longtime President Loretta Mester.

Federal Reserve Vice Chair Michael Barr Monday spoke at length about efforts to enhance banks' liquidity and long-term debt positions after last year's bank failures while saying little about the capital hikes in the embattled interagency Basel III endgame proposal.

Federal Reserve Chair Jerome Powell said there have been "no decisions" on the controversial capital reform plan, but banks and others who have criticized the proposal are eager for an indication about what's next.

The Federal Open Market Committee thinks that confusing everyone completely is good for confidence, that intangible but entirely necessary ingredient for financial stability, writes the Chairman of Whalen Global Advisors.

What ultimately keeps the balance-sheet reduction going, the bank said, is the fact that the Federal Reserve will likely be undeterred by any brief spikes in a key overnight funding benchmark — the rate on overnight repurchase agreements.

The Federal Open Market Committee held the federal funds rate at current levels, citing "lack of further progress" toward meeting inflation goals.