Federal Reserve June Rate Meeting Preview: Interest Rates Steady, Dot Plot Hides Rate Cut Clue for Second Half of the Year
Market Expects Rate Stability
The Federal Reserve's interest rate meeting on June 18-19, 2025, is approaching, and the market generally expects the federal funds rate to remain in the range of 4.25%-4.5%, continuing the policy wait-and-see stance after three rate cuts in 2024.
Dot Plot and Powell's Speech Become Focus
Two major signals to watch:
- Updated Rate Dot Plot: After cumulative rate cuts to 4.25%-4.5% in 2024, the median forecast for 2025 may point to 3.75%-4.0%, suggesting there is still space for two more rate cuts within the year;
- Powell's Speech: Powell's interpretation of inflation and employment data will provide guidance for the policy shift in the second half of the year.
Economic Data Opens Rate Cut Window
Current CPI year-on-year growth of 2.7% and core inflation of 3.3% meet expectations, combined with a moderate slowdown in non-farm employment data, leaving room for further easing by the Federal Reserve. The market is closely tracking the impact of indicators like PCE on the rate cut pace.
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