The US Federal Reserve's announcement on Wednesday that it would not be cutting interest rates any time soon was not a surprise.

For the past few months, inflation has crept back up steadily, causing significant headaches for policymakers, central bankers and investors who had been expecting not one but several interest rate cuts over the course of 2024.

The picture is not hugely different in Europe. Germany's inflation rate rose more than expected in April, on the back of strong food and energy prices. That has also reduced expectations that the European Central Bank (ECB) will make several rates cuts this year, as some had anticipated.

This recent data is "not really settling the issue of 'the last mile,'" Francesco Papadia, a senior fellow with the think tank Bruegel and a former director general for market operations at the ECB, told DW. "The news is not bad, but not as good as one may wish."

That last mile he refers to is getting inflation down to a consistent rate of 2%, a goal which has been shared by European and US central bankers since they began tackling the global surge in inflation which began in 2021 and peaked towards the end of 2022.

It leaves the US Fed in a particularly tricky position. "For the Fed, the threshold to raise rates is still greater than the threshold to cut," Diane Swonk, chief economist at consultancy KPMG US,........

© Deutsche Welle