Federal Reserve Likely to Maintain Interest Rates in June

🔍 Key Takeaways

Probability of no change: Markets view a rate hold for June as very likely—CME FedWatch shows a ~94% chance that the Fed will keep its benchmark rate in the 4.25%–4.50% range .

Fed officials’ signals: Officials like Governor Adriana Kugler, Philadelphia Fed’s Patrick Harker, and Kansas City Fed’s Jeffrey Schmid have expressed support for maintaining current rates through June, citing inflation risks driven by tariffs and labor market resilience .

Jobs data implications: A May jobs report showing 139,000 payroll additions kept wage growth elevated—higher wages—adding to inflation concerns and reinforcing the Fed’s cautious “wait-and-see” approach .

Policy projection context: Since May, the Fed has held rates at 4.25%–4.50% with a policy of patience. Market consensus now expects the first cut to come later, likely in July or September, rather than June .

📊 Summary Table

Date Event Fed’s Action / Signal

May 2025 Fed meeting Held rates at 4.25%–4.50%, adopted wait‑and‑see

May–June 2025 Fed official remarks Urge hold if inflation driven by tariffs persists June 6, 2025 Jobs and market reactions Solid job growth maintains pause bias June 17–18, 2025 Upcoming Fed meeting Expected hold; likely first cut in July/Sep

✅ Final Take

The Federal Reserve is very likely to keep rates unchanged at its June 17–18 meeting. The primary concerns remain persistent inflation—especially from tariff-driven price pressures—along with a still-strong labor market. Officials and market analysts expect any rate cut to come later, most likely in July or September, depending on upcoming data and how tariff developments unfold.