The probability of a rate cut in June 2025 is relatively low, and the likelihood of maintaining the current interest rate is greater. From an economic fundamental perspective, the U.S. GDP annualized quarter-on-quarter rate is expected to decline by 0.3% in the first quarter of 2025, showing clear signs of economic slowdown, but a recession has not yet occurred. Goldman Sachs predicts that the GDP growth rate in the fourth quarter will drop to 0.5%, and the economic outlook remains uncertain. Despite the slowing economic growth, inflation continues to be a key constraint. Current inflation is still above the Federal Reserve's target of 2% and is sticky, limiting the room for interest rate cuts. In terms of the job market, non-farm payroll employment increased by 177,000 in April, and the unemployment rate remained at 4.2%, with the overall job market performing moderately without significant deterioration, making it difficult to provide a strong basis for a rate cut.

Policy uncertainty also affects rate cut decisions. The tariff policy of the Trump administration has increased economic uncertainty, and the tariff grace period set by the White House and the deadlines for new tax cuts and spending bills are both in July, making policy progress unclear. The Federal Reserve may delay interest rate cuts to observe developments. Federal Reserve Chairman Powell stated on May 8 that the economy is still operating robustly and needs to continue monitoring data evolution. According to CME data, as of May 8, the probability of maintaining interest rates in June is 76.1%, while the probability of a 25 basis point cut is only 22.9%.

Overall, the economy is slowing but not in recession, inflation remains sticky, the job market is stable, and policy uncertainty is high. These factors make the probability of a rate cut in June relatively low. Market expectations are also leaning more towards a rate cut in July or later.

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