Overview

• The Federal Open Market Committee unanimously held the benchmark federal funds rate at 4.25%–4.50% following its June meeting.
• The updated dot plot still projects two quarter-point rate cuts by the end of 2025 despite growing uncertainty over growth and prices.
• Fed participants trimmed their 2025 GDP growth forecast to about 1.4% while raising the personal consumption expenditures inflation projection to roughly 3%.
• Officials pointed to the unclear impact of President Trump’s tariffs and the Israel-Iran conflict on oil costs as key reasons for maintaining a cautious stance.
• Recent data showing a 0.2% contraction in first-quarter GDP and a nearly 1% drop in May retail sales highlight cooling consumer demand.