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What Happened at the June FOMC Meeting
The Federal Open Market Committee (FOMC) convened June 17–18 in Washington to decide U.S. monetary policy. As widely expected, the Committee kept the federal funds rate steady at 4.25%–4.50%—marking no change for the third consecutive meeting (reuters.com, pepperstone.com). This decision reflects a cautious stance amid mixed economic signals.
Economic Data & Key Drivers
FactorRecent Trends & ConcernsInflationCPI and PPI softened in May, easing some pressure. Headline & core inflation remain above the Fed’s 2% target, influenced partly by tariffs (fxleaders.com, kiplinger.com).Labor MarketSteady unemployment (~4.2%), solid job gains, though some signs of cooling .Geopolitical & TradeUncertainty from Middle East tensions and U.S. tariff actions affected oil prices and inflation outlook .Global Risk & FiscalElevated federal deficits and trade friction add further complexity .
Committee Commentary & Outlook
The Fed adopted a "wait-and-see" approach, emphasizing data dependency. Policymakers refrained from indicating imminent rate cuts (investopedia.com).
Powell noted inflation is making modest progress, but clarity is needed before any pivot (principalam.com).
The Summary of Economic Projections (“dot plot”) suggests fewer cuts in 2025, with first cut likely in September or later, indicating steady caution (morningstar.co.uk).
Market odds for a June cut were near zero (~0.1%), with over 99% probability of rate hold (fxleaders.com).
Market & Policy Implications
Investors responded with mixed sentiment:
Equities steadied as oil prices cooled after Middle East spikes (fxleaders.com, reuters.com).
Bond futures show about a 60% chance for a cut by September, though the economic path remains uncertain (morningstar.co.uk).
Key upcoming signals:
Dot plot update and projections—will they reinforce fewer cuts?
Powell’s press conference—watch for hints on the timing and scale of easing.
June inflation & jobs data—essential to shift policy expectations (forbes.com, roancp.com).
