Fed Minutes Preview: Rate cut signals expected amid tariff volatility
The Minutes of the United States (US) Federal Reserve’s (Fed) June 17-18 monetary policy meeting will be published on Wednesday at 18:00 GMT. Policymakers decided to maintain the policy rate at the range of 4.25%-4.5%, but the revised Summary of Projections (SEP) showed that policymakers were projecting two 25 basis-point (bps) rate cuts in 2025.
Jerome Powell and co decided to hold policy settings unchanged after June meeting
The Federal Open Market Committee (FOMC) decided to keep the interest rate unchanged at the June meeting. In the policy statement, the US central bank reiterated that inflation was still “somewhat elevated,” while labor market conditions remained solid with a low unemployment rate.
The SEP highlighted that policymakers still see a 50 bps reduction in the policy rate in 2025 but now forecast only a 25 bps cut in 2026, compared to the 50 bps projected in March's SEP. In the post-meeting press conference, Fed Chairman Jerome Powell reiterated that they don’t need to be in a hurry to make any adjustments to the policy.
Although several Fed officials noted that they are open to the idea of lowering the interest rate in July, the upbeat June employment report reaffirmed that the Fed is likely to wait until September to ease the policy. The Unemployment Rate declined to 4.1% from 4.2% in May and Nonfarm Payrolls rose by 147,000, surpassing the market expectation of 110,000.
Source: FXstreet
