Federal Reserve officials say they are preparing to lower borrowing costs twice this year as inflation continues to cool and the labor market remains resilient. The shift suggests policymakers believe the economy may now have enough room to begin easing monetary policy without immediately reigniting price pressures.

The comments reflect growing confidence inside the central bank that recent data point to slower inflation after a period of aggressive rate increases. At the same time, officials appear cautious, emphasizing that any move will depend on how incoming economic reports develop in the months ahead.

For households and businesses, a potential cut in interest rates could eventually reduce borrowing costs on mortgages, loans, and credit, though the timing and size of any relief will depend on the Fed’s next decisions. Markets are likely to watch closely for signals on whether the central bank follows through with the expected pace of easing.

Still, policymakers face a delicate balancing act: moving too quickly could undermine progress on inflation, while waiting too long could keep borrowing expensive for longer than necessary. The latest guidance suggests the Fed is leaning toward a gradual shift rather than a rapid policy reversal.