#FOMCMeeting The Federal Open Market Committee (FOMC) convened for its June 17–18, 2025 meeting amid a complex economic landscape characterized by moderating inflation, robust employment figures, and heightened uncertainty stemming from trade policies and fiscal developments.

Key Takeaways from the June 2025 FOMC Meeting

1. Interest Rates Unchanged

The FOMC decided to maintain the federal funds rate within the 4.25%–4.50% range, aligning with market expectations. This decision reflects the Committee's cautious approach, balancing the need to support economic growth while managing inflation risks. Despite pressures from President Trump advocating for more aggressive rate cuts, the Fed emphasized its commitment to data-driven decision-making, independent of political influence .

2. Economic Projections

The Summary of Economic Projections (SEP) indicated a slight downward revision in GDP growth forecasts for 2025, from 2.1% to 2.0%. Core Personal Consumption Expenditures (PCE) inflation projections were adjusted upward to 2.8%, influenced by recent tariff implementations. The unemployment rate forecast remained stable at 4.4% .

3. Inflation Trends

Recent data revealed a cooling in inflation, with the Consumer Price Index (CPI) excluding food and energy costs declining by 0.1% in June, marking the smallest rise in three years. This trend, attributed in part to a slowdown in housing prices, has bolstered expectations for potential rate cuts later in the year .

4. Global and Domestic Risks

The Fed acknowledged increased uncertainty due to ongoing trade tensions, particularly President Trump's tariff policies, and the proposed $2.4 trillion fiscal stimulus package. These factors contribute to inflationary pressures and complicate the economic outlook, prompting the Fed to adopt a "wait-and-see" stance .

5. Market Reactions

Financial markets responded positively to the Fed's decision, with major indices such as the S&P 500, Nasdaq 100, and Russell 2000 experiencing gains.