The latest Federal Open Market Committee (FOMC) meeting is currently underway on June 17–18, 2025. While the Federal Reserve is expected to maintain the federal funds rate at 4.25%–4.50%, the economic landscape is being influenced by rising geopolitical tensions, particularly the Israel-Iran conflict. This situation has led to significant oil price volatility and heightened inflation concerns, which are likely to be discussed during the meeting.
Economic indicators such as retail sales and industrial production for May are anticipated to show weakness, reflecting potential stagflationary effects from recent trade policies. The Fed's Summary of Economic Projections, to be released alongside the policy statement, is expected to reflect slower growth and higher inflation forecasts compared to March, possibly leading to a more hawkish outlook with fewer rate cuts anticipated this year.
While President Trump has increased pressure on Fed Chair Jerome Powell to cut borrowing costs, recent economic data, including softer-than-expected inflation figures, suggest that the Fed may maintain current rates for a longer period. The upcoming retail sales data and corporate earnings reports will provide further insight into the economy's strength and influence market expectations.
Fed Chair Jerome Powell is scheduled to address these developments in a press conference on Wednesday, providing further clarity on the Fed's policy stance.