FED'S ECONOMIC FORECAST SUMMARY (07/19/2025)

1️⃣Statement

The Fed decided to keep interest rates at 4.25% - 4.5% for the fourth consecutive meeting. As expected by the market and unchanged from the March 2025 forecast.

2️⃣Economic forecast

- GDP growth for 2025 DECREASES from 1.7% (March 2025) to 1.4%, reflecting concerns about a slowing economy.

- Unemployment rate INCREASES forecast from 4.4% to 4.5%.

- PCE inflation INCREASES from 2.7% to 3.0%.

3️⃣Monetary policy forecast (Dot plot)

- 7 officials believe that interest rates should not be cut in 2025 (up from 4 in May) 🦅

- 2 officials believe that there should be 1 rate cut (down from 4 in May)

- 8 officials vote for 2 rate cuts this year (down from 9 in May) 👉Dominant

- 2 officials believe that there should be 3 rate cuts in 2025 (unchanged)