In the June FOMC meeting, the Federal Reserve kept interest rates unchanged, which was anticipated by the markets. While the decision did not shift market dynamics, the FOMC statement included minor changes in wording. The updated Summary of Economic Projections showed a noticeable shift compared to the March update, reflecting changes in economic conditions. The committee now expects slower growth than previously forecasted, a slight increase in the unemployment rate without major concerns regarding the labor market, and higher inflation expectations for 2025, rising from 2.7% to 3%. Interestingly, the forecast for rate cuts remained at two by year-end, despite some members leaning toward no cuts for the year. The overarching theme from the meeting portrayed a cautious Fed, navigating uncertainties like tariff risks and geopolitical tensions. This restraint seems linked to the Fed Chair’s aim to maintain stability through the end of their term.

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