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Fed Set to Keep Rates Unchanged as Oil Spike and Tariffs Heighten Inflation Concerns

Officials will rely on the Fed’s updated forecasts to decide if further monetary easing is warranted.

Fed Chair Jerome Powell speaks at the 75th anniversary conference of the Federal Reserve Board's International Finance Division in Washington on June 2.
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The US Federal Reserve is widely expected to keep interest rates between 4.25 percent and 4.50 percent at its June meeting
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Overview

  • The Fed is widely expected to maintain its benchmark interest rate at the June meeting, extending its hold since December.
  • Oil prices jumped nearly 9% after Israel struck nuclear and military sites in Iran, stoking concerns over energy-driven inflation.
  • President Trump has demanded an immediate one percentage point rate cut, intensifying pressure on the central bank.
  • May data showed employers added 139,000 jobs and inflation held near the Fed’s 2% target, underpinning policymakers’ caution.
  • CME Group’s FedWatch tool indicates just a 3% chance of a cut this month, with investors shifting bets toward an October rate reduction.