The Federal Reserve is considering ending aggressive rate hikes to lower inflation, but softening financial conditions in recent weeks may pose a threat to monetary policy.

Goldman Sachs’ financial conditions index, a measure of financial market tightness, surged to its highest point of the year amid a massive Treasury bond market rout, only to aggressively ease at the end of October, returning it to August’s final level.

This change confuses the Fed narrative, as looser financial conditions may hinder inflation reduction.

However, current and former Fed officials and private sector economists argue that financial conditions must be examined over a longer time horizon, focusing on real-world borrowing rates that can boost or impede growth.

The Fed is likely to maintain the federal funds rate at 5.25%–5.5% in its policy meeting ending Wednesday.