FOMC Meeting:
1. Meeting Schedule & Key Events
- Dates: June 17–18, 2025 (today and tomorrow).
- Policy Statement Release: Wednesday, June 18, at 2:00 p.m. ET.
- Chair Powell's Press Conference: Wednesday, June 18, at 2:30 p.m. ET.
2. Interest Rate Decision
- The Fed is highly likely to maintain rates at the current range of 4.25%–4.50%, unchanged since December 2024.
- Market odds of a cut are near 0% for June and only 13% for July.
3. Focus: "Dot Plot" Projections
- This meeting includes the Summary of Economic Projections (SEP), or "dot plot," revealing Fed officials' rate forecasts for 2025–2026.
- Key expectations:
- Fewer rate cuts in 2025: Likely reduced from two cuts (projected in March) to just one cut by year-end.
- Higher inflation: Forecasts may rise to 3.0%–3.3% (from 2.8%) due to tariff impacts.
- Slower growth: GDP projections could be downgraded to 1.3% (from 1.7%).
4. Political Pressure & Uncertainty
- President Trump has publicly criticized Fed Chair Powell, demanding "a full percentage point cut" and calling him a "numbskull" for resisting.
- New tariffs and fiscal policies are complicating the Fed's outlook, creating "uncomfortable purgatory" between inflation risks and growth concerns.
5. Market Impact
- Stocks: A shift to one 2025 cut could trigger a ~1% S&P 500 sell-off; holding at two cuts may lift markets.
- Bonds: Futures traders price in a 60% chance of a cut by September, with 88% odds of at least two cuts by December.