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12h ago

Fed Keeps Benchmark Rate at 4.25%–4.50%, Officials Split on Easing Timeline

Jerome Powell says the Fed must gauge how tariffs influence inflation before reducing rates

Federal Reserve Bank of Atlanta President Raphael Bostic attends the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, U.S., August 24, 2024. REUTERS/Ann Saphir/File Photo
Apollo Global Management Chief Economist Torsten Slok offers a challenging outlook for interest rates, tariffs, and recession odds.
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Overview

  • At its June 18 meeting the Federal Open Market Committee held the federal funds rate at 4.25%–4.50% under a “wait-and-see” policy stance.
  • Powell emphasized that the full impact of volatile tariff measures on inflation and employment needs more data before any rate cuts.
  • Minneapolis Fed President Neel Kashkari reiterated his forecast of two 25-basis-point cuts in 2025, with the first possibly in September if economic indicators soften.
  • Governors Christopher Waller and Michelle Bowman signaled a cut as soon as the July 29–30 meeting if tariff-driven price pressures prove short-lived.
  • Apollo Global Management chief economist Torsten Slok expects just one rate reduction this year, while President Trump has urged a sharp cut to 1%.