"With only two sets of inflation data and just over two months until the May meeting, his comments suggest to us that a rate cut as early as May, which we had previously expected, is unlikely," wrote Goldman Sachs analysts in a note. They now expect a further cut next year, with an unchanged final rate forecast of 3.25% to 3.5%.

CME's FedWatch tool, which provides rate movement probabilities based on futures contracts, gives only a 21% probability to a rate cut in May, or 79% in favor of a status quo in the current range (5.25 to 5.50%). A rate cut following the June 11-12 meeting, on the other hand, is assigned a 64.7% probability on February 23, 2024, versus 35.3% for a pause.