The first point to remember, economists say, is that the Fed believes its current benchmark interest rate — at a range of 4% to 4.25% — is so high that it is actually slowing down the U.S. economy. Fed officials have debated how much it is slowing the economy, but they all agree on this basic fact.

Paraguay’s central bank held its benchmark interest rate steady at 6%, reiterating that it sees inflation converging to its target next year.

"Tariffs have put upward pressure on prices, particularly in the goods-producing sector of the economy," Brandon Zureick, senior managing director and chief economist at investment firm Johnson Inves...