Sorry, America, it's looking like higher interest rates are going to stick around longer

• The Federal Reserve is expected to once again hold interest rates steady on Wednesday.
• Some economists predict there won't be interest-rate cuts until the second half of the year.

It's probably still not time for the nation's central bank to cut interest rates anytime soon.

On Wednesday, the Federal Open Market Committee will announce whether it will continue holding interest rates steady or give Americans some relief from sky-high mortgage and credit-card rates, and it's looking likely it will choose the former. The CME FedWatch Tool, which estimates the market's views on probabilities for interest rate changes, predicts there's a 97.1% chance rates will remain unchanged as of Monday morning.

It all comes down to the data. Julia Pollak, chief economist at ZipRecruiter, told Business Insider after the jobs report published earlier in April that it was "the Fed's holy grail: strong job market with non-inflationary growth."

That report showed average hourly earnings rose by 4.1% year over year in March, which is at a slower rate than in the last few years, the unemployment rate wasn't too high, and there was strong job growth, with 303,000 jobs added. In addition to the growth in January and February, these monthly job gains indicate that 2024 has had a strong labor market so far.

However, even with the strong data, inflation isn't quite where it needs to be. Fed Chair Jerome Powell said he needs to see more consistent proof that the economy is moving in the right direction before cutting interest rates, stressing that it's best to hold off rather than cut too early — and risk having to hike rates again.

Inflation based on the consumer price index and the personal consumption expenditures price index both accelerated in March — the CPI rose 3.5% year-over-year in March after a 3.2% reading in February.

"The recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence," Powell said during a panel discussion in Washington in April.

Thursday's news release from the Bureau of Economic Analysis about GDP showed the US economy continued to slow. Real GDP growth at an annualized rate ended up cooling down more than expected — with an estimate of 1.6% compared to the 2.5% forecast.

Given that inflation is still above the Fed's 2% target, it's looking like rate cuts might not come until the second half of 2024. According to the CME FedWatch Tool, there's an 88.4% chance rates will remain steady again after the Fed's next meeting in June, with just an 11.3% chance of a rate cut.

"Right now, given the strength of the labor market and progress on inflation so far, it's appropriate to allow restrictive policy further time to work," Powell said during the April panel discussion. His cautious remarks have some experts predicting that cuts will likely not come until July at the earliest.

"With Powell indicating the Fed should allow restrictive policy further time to work and a clear majority of policymakers favoring two or fewer rate cuts, we expect only two 25bps rate cuts in 2024 in July and November," Gregory Daco, EY's chief economist, said in a recent commentary.

Still, some Democratic lawmakers have been urging Powell to consider cutting rates sooner rather than later to provide relief to Americans who are struggling with high prices. Ahead of the FOMC's March decision to hold rates steady, a group of 23 Democrats asked Powell to "seriously consider the harmful economic consequences of maintaining excessively high interest rates for an unnecessarily long period of time."

"With inflation already having come into line with the Federal Reserve's target, today's excessively contractionary monetary policy needlessly worsens housing market imbalances and the unaffordability of home ownership, creates risks for banking stability, and could threaten the achievements of strong employment and wage growth and its attendant reductions in economic and racial inequalities," the letter from the group of Democrats said.

For now, proceeding carefully is Powell's core focus — and it'll likely mean the relief Americans want will not come until the second half of this year.

"Despite evidence that economic growth is beginning to slow, the Federal Reserve isn't as close to cutting interest rates as they thought they might be at their last meeting in March," Greg McBride, chief financial analyst for Bankrate, said in a statement. "Inflation has continued to run hot and there is no compelling need for the Fed to cut interest rates until they're comfortable with where inflation is headed."