#FOMCMeeting

June 17–18, 2025 Meeting Highlights

• Rate Decision: The Fed held the federal‑funds rate steady at 4.25%–4.50%, marking the fourth consecutive meeting with no change .

• Dot-Plot Update: The Summary of Economic Projections hinted at a reduction in the number of expected rate cuts from two to one in 2025—markets now anticipate a first cut more likely by September .

• Fed’s Rationale: Although inflation has eased and labor data softened, uncertainties—led by geopolitical tensions, tariffs, and rising oil prices—prompted the Fed to adopt a cautious pause .

• Market Expectations: CME FedWatch shows only a 12% probability of a July cut, rising to ~60–62% by mid-September .

• Press Conference: Chair Powell’s post-meeting remarks are being closely watched for clues on future steps.

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📊 What Analysts Are Watching

• Inflation data: Continued modest Consumer Price and Producer Price Index readings will provide guidance.

• Labor trends: Cooling job growth and rising claims add to the narrative.

• Global risks: Tariffs and Middle Eastern dynamics that could add inflationary pressure.

• Fed commentary: Any shift in tone—hawkish or dovish—could move markets.

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💡 How You Can Respond

• For Savers/Bond Investors: A hold signals continued higher yields; a September cut might reduce future income.

• For Borrowers/Equity Investors: A rate cut would ease borrowing conditions but signals economic cooling.

• Currency markets: A delay in cuts could help $USDC strength; vice versa for easing.

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Bottom line: The June FOMC stopped short of easing but set expectations for a likely September cut, contingent on ongoing inflation moderation and labor-market dynamics.