The dot plot released by the Federal Reserve after today's (June 18, 2025) FOMC meeting shows that officials have changed their expectations for the future path of interest rates, overall releasing a signal leaning towards 'hawkish'.
2025 Rate Cut Expectations: From Two Cuts to One
The most noteworthy change in this dot plot is that the median expectation of Federal Reserve officials regarding the number of rate cuts in 2025 has been adjusted from two cuts (previously in March) to only one cut. This means that most officials believe that, due to persistent inflation pressures and the resilience of the economy, the pace of rate cuts will be slower than previously anticipated.
* Influencing Factors: This adjustment is mainly influenced by the following factors:
* Inflation Stickiness: Although there is a trend of slowing inflation, it remains above the Federal Reserve's 2% target, and the pace of inflation decline is not as expected. The statement also reiterated concerns about inflation.
* Uncertainty of Tariff Policies: New tariff policies may exert upward pressure on prices, increasing uncertainty about the inflation outlook and prompting the Federal Reserve to be more cautious.
* Resilience of Economic Data: U.S. economic activity continues to expand at a robust pace, and the labor market remains solid, which means the Federal Reserve does not feel an urgent pressure to cut rates.
2026 and 2027 Rate Cut Expectations: Slight Downward Adjustment
The dot plot also shows that Federal Reserve officials have slightly lowered their rate cut expectations for 2026 and 2027, anticipating a cut of 25 basis points each year. This implies that even if the rate cut process begins, it will be a gradual process rather than a rapid and significant cut.
Long-Term Rate Expectations: Unchanged
As for the long-term median expectation of the federal funds rate, it remains unchanged at 3%. This reflects that Federal Reserve officials' long-term view of the neutral rate has not changed.
Market Interpretation and Potential Impact
The changes in this dot plot are generally interpreted by the market as a **'hawkish' signal**, which may have the following potential impacts on the market:
* Strengthening of the Dollar: The reduction in rate cut expectations may support the dollar exchange rate, as higher interest rates attract capital inflows. $USDC $BTC #美联储FOMC会议
