Overview

• Minutes from the Fed’s early May meeting show that officials agreed to wait for more clarity on inflation and growth before cutting rates.
• Federal funds futures indicate a 98% probability that the Fed will leave its target range unchanged at its June meeting.
• Staff projections warn that tariffs are expected to boost inflation markedly this year and continue to increase price pressures into 2026.
• Fed staff judged that a recession was nearly as likely as its forecast for subdued growth and higher unemployment.
• Recent data show consumer price inflation at 2.3% in March, a 0.3% drop in first-quarter GDP, and unemployment holding at around 4.2%.