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4h ago

Federal Reserve Holds Rates at 4.25%–4.5% and Signals Two Cuts

Tariff-driven inflation concerns have prompted the Fed to hold rates steady

Chair of the U.S. Federal Reserve Jerome Powell speaks during a press conference following the Federal Open Market Committee meeting in Washington, DC, on June 18, 2025.
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Overview

  • On June 18, the Federal Open Market Committee voted to keep its benchmark rate at 4.25 percent to 4.5 percent for the fourth time this year
  • Jerome Powell warned that recent tariff increases are poised to push up consumer prices and curb economic activity, deterring an immediate rate cut
  • The Fed downgraded its 2025 GDP growth forecast to 1.4 percent while lifting its inflation outlook to 3 percent and projected two rate reductions by year-end
  • Steady policy has kept the average 30-year fixed mortgage rate near 7 percent, contributing to a decline in home sales and a rise in housing inventory
  • President Donald Trump has publicly criticized Powell’s hawkish stance, accusing him of delaying rate cuts despite global central banks easing monetary policy