Federal Reserve Chairman Jerome Powell, in his prepared remarks for a Congressional appearance, emphasized the lack of urgency in reducing interest rates. This statement aligns with his previous communications, as several FOMC members have indicated the importance of first gaining clarity on the tariffs that the US government may implement and their subsequent economic impact before considering changes to key interest rates.
As anticipated, the FOMC maintained the federal funds rate at 4.25%–4.50% during its fourth consecutive meeting in June 2025. The Summary of Economic Projections released with this decision continues to indicate two potential rate cuts this year, with the outlook suggesting only a single quarter-percentage-point reduction in 2026 and 2027. Additionally, the Federal Reserve has revised its GDP growth forecast downward, predicting a 1.4% growth in 2025 (down from 1.7% in March) and 1.6% in 2026 (down from 1.8%), while maintaining the 2027 growth estimate at 1.8%.
