#FOMCMeeting Key considerations

1. Inflation & oil prices

Inflation remains "somewhat elevated" and sticky, fueled by rising energy costs amid Middle East tensions .

Recent spikes in oil prices due to geopolitical unrest have reinforced the Fed's caution .

2. Trade & tariffs

U.S. trade policy uncertainty—tariffs and global tensions—has added complexity to the economic outlook .

3. Labor market & growth

The labor market remains solid, though with signs of cooling—moderating payrolls and slight uptick in unemployment claims .

May retail sales and industrial output showed weakness, raising concerns of near-term growth softness and potential stagflation .

4. Market expectations

Markets now expect the earliest rate cut in September 2025, with probability around 55–60%. Some economists believe a cut might only come in Q4—or even later .