Monetary policy

The Philadelphia Fed president said there can be as few as no cuts or as many as two this year, but if his projections are accurate, one decrease would be appropriate this year.

"We need to see more evidence to convince us that inflation is well on our way back down to 2%," Federal Reserve Bank of Minneapolis President Neel Kashkari said.

"I think the risks to inflation are still on the upside," Federal Reserve Bank of Cleveland President Loretta Mester said. "I think the risk to the labor market is dual-sided."

With no change in rates expected, analysts are interested in the dot plot and Fed Chair Jerome Powell's press conference.

"The Fed is going to have to pivot — not on the basis of inflation numbers, but the basis of the real economy," Mohamed El-Erian said.

New York Fed President John Williams said the Fed "will cut rates eventually" during a fireside chat at Milken Institute's Global conference on Monday.

"The Fed is certainly not going to be overly concerned about the growth backdrop" at this week's Federal Open Market Committee meeting, said BMO Chief Economist Douglas Porter.

Recent economic data have shown inflation stubbornly above the Fed's 2% target, putting rate cuts in jeopardy. Lauren Saidel-Baker, an economist with ITR Economics, parses the FOMC meeting, Chair Powell's press conference and takes a look at future policy.

The minutes underscored officials' reluctance to lower rates until they have more evidence inflation is firmly on a path to 2%, the rate they see as the sweet spot in a healthy economy.

The ISM report "feeds into the narrative coming out of last week," whereby the economy's resilience enables the Fed "to be patient," said Gregory Faranello, head of U.S. rates trading and strategy for AmeriVet Securities. For the bond market, that means rates stay "higher for longer."