America seemed headed for an economic fairy-tale ending in late 2023. The painfully rapid inflation that had kicked off in 2021 appeared to be cooling in earnest, and economic growth had begun to gradually moderate after a series of Federal Reserve interest rate increases.

But 2024 has brought a spate of surprises: The economy is expanding rapidly, job gains are unexpectedly strong and progress on inflation shows signs of stalling. That could add up to a very different conclusion.

Another firmer-than-anticipated inflation report delivered a meaningful setback Wednesday to the Federal Reserve’s hope that it could buoy prospects of a so-called soft landing by dialing back some of the past year’s interest-rate increases.

Solid hiring and the prospect that inflation might settle out closer to 3% than the Fed’s 2% goal could call into question whether the central bank will be able to cut rates until much later in the year without evidence of a sharper slowdown in the economy.

President Joe Biden is standing by his prediction that the Federal Reserve will enact an interest rate cut before the end of the year. The President doubled down on the rate cut prediction despite a Consumer Price Index (CPI) print released on Wednesday suggesting that inflation was reaccelerating.