The Bank of England's decision to keep its key interest rate unchanged at 5.25% suggests that a rate cut in the US may be further down the line than expected. Despite UK inflation returning to the central bank's 2% target in May, the Bank of England chose to maintain its current rate. This decision offers another reason to be cautious about expecting US rate cuts in the near future. While UK inflation is lower than that of the US, the macro outlook for the two countries is evaluated differently. Market expectations in the US still anticipate a rate cut, with Fed funds futures estimating a 66% probability of a rate cut announcement at the September 18 FOMC meeting. However, the timing of the first rate cut by the Federal Reserve remains uncertain. US inflation is still above the 2% target, and the case for rate cuts based on inflation forecasts remains uncertain. Federal Reserve Governor Adriana Kugler remains cautiously optimistic about inflation coming down but believes that policy still has more work to do [36f9fddd].