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yesterday

Fed Keeps Rates Steady as Officials Clash Over Cut Timing

Fed officials are split on whether to cut rates in July or delay easing until autumn, with tariff uncertainty fueling doubts under mounting presidential pressure.

Apollo Global Management Chief Economist Torsten Slok offers a challenging outlook for interest rates, tariffs, and recession odds.
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Overview

  • The Federal Open Market Committee left the federal funds rate at 4.25%–4.50% on June 18, marking its sixth straight pause as officials track the effects of recent tariffs.
  • Minneapolis Fed President Neel Kashkari reaffirmed his forecast of two quarter-point cuts in 2025, with the first potentially in September depending on incoming data.
  • Governors Christopher Waller and Michelle Bowman signaled that a rate cut could come at the July 29–30 meeting if tariff-driven inflation proves transitory.
  • Apollo Global Management chief economist Torsten Slok now expects only one rate reduction by year-end, projecting a 4.00%–4.25% federal funds range and higher recession risks.
  • President Trump repeated on June 27 his demand for a drastic cut to 1% at the Fed’s late July meeting, intensifying political pressure on policymakers.