The Fed's preferred inflation gauge was up 0.3% in March—a 2.8 percent increase from a year earlier

With the presidential election looming, the stalling of inflation improvements may limit the Fed's ability to cut at all this year.

Powell's remarks suggest that the Fed is unlikely to reduce rates at their next gathering taking place late this month.

Despite hitting a bump on the road to low inflation, a majority of FOMC members still expect—for now—to cut rates three times in 2024.

If Fed officials pencil in, at their meeting next week, three quarter-point rate reductions for 2024, they will set the stage for a cut in June.

"If the moves look random, then it potentially creates a problematic appearance. As long as they can make a credible case that they are data-dependent, they are OK."

Productivity growth has averaged 3.9% over the past three quarters, more than triple the rate seen in the decade prior to the pandemic.

Despite a favorable pullback in inflation, Federal Reserve policymakers are in no rush to lower rates.