The minutes from the Federal Open Market Committee's June meeting revealed that the majority of Federal Reserve officials deemed a reduction in the federal funds rate as likely to be appropriate at some stage this year. They noted that the inflationary pressures from tariffs might be either temporary or minimal, while medium- and long-term inflation expectations have remained stable. Additionally, there is a possibility of some weakening in economic activity and labor market conditions. Nonetheless, while some participants suggested that a rate cut might be imminent, possibly as soon as the next meeting, others were of the opinion that no rate reductions should occur this year.
Moreover, the policymakers emphasized that the uncertainty surrounding the economic outlook was heightened due to factors like trade policies, other governmental policies, and geopolitical risks. However, they acknowledged that overall uncertainty had decreased since the previous meeting. The Federal Reserve decided to maintain the federal funds rate at 4.25%–4.50% for the fourth consecutive meeting in June 2025, as they await greater clarity on the inflation and economic activity outlook.
