#FOMCMeeting

📌 Key Highlights

1. Rate decision

The Fed held the federal funds target at 4.25%–4.50%, marking a third consecutive pause. This aligns with nearly 100% market expectations via CME's FedWatch tool .

2. Tone and outlook

The statement adopted a cautious, data-dependent approach—“wait‑and‑see”—remaining vigilant about ongoing inflation and labor market signals .

Geopolitical and tariff-driven risks, particularly from recent U.S. tariffs and global instability, are keeping policymakers on edge .

Economists anticipate just one 25 bps rate cut in 2025, less than previously expected—markets now expect this in September, with higher odds by December .

3. Dot plot & economic projections

The Fed’s updated dot plot will be closely watched: projections are expected to indicate only one rate cut for 2025, compared to two in March.

Expected revisions include slightly downgraded GDP growth (to ~1.2% for Q4), elevated inflation forecasts (~3%), and a modest uptick in unemployment to ~4.5% .

4. Focus: Powell's press conference

Chair Powell will speak at 2:30 p.m. ET (~11:30 p.m. Pakistan local time).

Analysts expect he’ll emphasize uncertainty from tariffs, reiterate the Fed’s independence, and highlight the central bank’s patience .

5. Market reaction

Equities edged lower ahead of the decision (S&P 500 −0.3% on Tuesday), while bond yields softened on expectations of a slower tightening cycle .

Oil prices are also being closely watched due to their inflationary ripple effects .

✅ Summary

The Fed maintained its stance at 4.25%–4.50%, signaling a cautious pause as it assesses inflation risks tied to tariffs and global uncertainty. The dot‑plot is expected to show just one rate cut this year, likely in September, with more emphasis on inflation control than growth stimulation.

Markets will now turn to Powell’s dot‑plot updates and his press‑conference remarks for cues on the timing and scale of future easing.