Chances are dimming that the Fed will cut interest rates this year. This week's inflation report could be a game-changer.

The U.S. central bank likely remains on track to cut interest rates this year even if the timing and extent of the policy easing is uncertain and further declines in inflation come only slowly, Atlanta Federal Reserve President Raphael Bostic said in an interview with Reuters.

The Federal Reserve said Wednesday it will hold interest rates at a 23-year high, making borrowing tougher for everything from car loans to mortgages.