FX.co ★ Fed Expected to Maintain Rates, Focus on Projections

The Federal Reserve is anticipated to maintain the federal funds rate at its current level of 4.25%–4.50% for the fourth meeting in a row in June 2025. This decision reflects a cautious approach as policymakers aim to thoroughly assess the economic implications of President Trump's policies, especially those concerning tariffs, immigration, and taxation. This meeting also coincides with the release of updated economic forecasts, the first since Trump's April 2 “Liberation Day” announcement, which introduced comprehensive new tariffs. Up to this point, available data on the U.S. economy has not shown any immediate issues of concern. Headline inflation is currently at 2.4%, while core inflation registers at 2.8%. The unemployment rate has remained stable over the past three months, even with a deceleration in job growth. Financial markets will be paying close attention to the Federal Reserve's "dot plot" to determine whether policymakers are still forecasting two rate cuts this year, or if there has been any alteration in their predictions.