👉👉👉The Federal Reserve (Fed) kept interest rates steady at 5.25-5.5% for the fourth consecutive meeting, as announced on June 18, 2025. Chairman Powell emphasized the need for 'more confidence' that inflation is sustainably decreasing to 2%, although recent data shows CPI at 2.4% year-on-year in May 2025, down from 3.3% previously. The Fed's 2025 forecast indicates the possibility of two rate cuts—down from three in the prior forecast—reflecting a cautious trend that prioritizes controlling inflation over immediate economic stimulus. Trump's public criticism, calling for a 2% cut to boost economic growth, adds political pressure but is unlikely to sway the Fed's data-driven approach, based on Powell's precedent of resisting such pressures.
👉👉👉Market reactions show mixed sentiment. Stocks dipped slightly after the announcement, with the S&P 500 down 0.3%, while the yield on 10-year Treasury bonds rose to 4.35%, signaling expectations of prolonged high-interest rates.
👉👉👉Delays may occur if inflation stagnates or geopolitical tensions (e.g., trade wars during Trump's presidency) cause prices to rise again. The Fed's forecast chart and Powell's 'data-dependent' remarks indicate a slow shift, with the market pricing in a 60% chance of a cut in September according to CME FedWatch. Pressure from Trump may increase volatility but cannot force the Fed to act without a crisis.
⭐⭐⭐Caution is needed—prolonged high-interest rates may pressure valuations, but a soft landing scenario remains feasible if data is favorable. Stay flexible, monitor CPI and employment reports, and avoid chasing speculative bets based on rate cut expectations.
$USDC
