The United States GDP (gross domestic profit) grew by only 1.6% in the first quarter, the smallest increase in over two years. The Federal Reserve has seemingly elected to wait for more inflation data and keep interest rates where they are as inflation continues to be hard to nail down. Wall Street experts have gone back and forth over when the Fed will cut rates, if it will even cut rates in 2024, and the slim chance of rates being pushed higher.

Harvard University's Kennedy School of Government Professor Jason Furman joins Yahoo Finance to discuss the health of the economy and his theory on how — or if — the Fed will follow through with rate cuts this year.

"The big surprise here was that at an annual rate in the first quarter, core PCE inflation — which is basically what the Fed is looking at — was a 3.7% annual rate. As recently as two months ago, that was expected to be 2.1%. Forecasters thought, mission accomplished," Furman, who was the Council of Economic Advisors Chair during the Obama Administration, assesses. "Instead, we now have a red flashing warning sign. The Fed will not be able to be reassured enough about inflation to cut rates any time this year... The only thing that's going to get us Fed rate cuts any time soon is a much more rapid deterioration in the job market than I expect to get or hope to get, but that's the contingency under which the Fed cuts rates before December. "

For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Nicholas Jacobino