The Federal Reserve decided to maintain the benchmark interest rate in the range of 4.25%–4.50% at the FOMC meeting on June 17–18, 2025. This is the third consecutive decision amidst signs of slowing inflation and increasing external risks.
The Chair of The Fed stated that this policy was adopted with a "cautious" approach, considering global uncertainties, including geopolitical tensions and potential impacts of new trade policies. Although the May inflation data showed moderation, The Fed emphasized the need for stronger evidence before beginning to ease monetary policy.
With this decision, market expectations for interest rate cuts have shifted to September or the end of the year, replacing previous projections for July. The Fed is scheduled to provide further insights at the Jackson Hole symposium in August, which is likely to be a turning point for the next monetary policy direction.