US Fed Retains Key Rate At 4.25%-4.50%, Dot Plot Signals Two Cuts Ahead In 2025 — Key Highlights

Here are the main highlights at a glance:

• Fed keeps benchmark interest rate steady at 4.25%–4.5%.

• The dot plot shows the median Fed official expects two 25 basis points cuts in 2025, unchanged from March projections.

• Statement removes prior warning about rising risks of higher inflation and unemployment, and adds that uncertainty about the outlook has diminished but remains elevated.

• Core PCE inflation forecast for end-2025 raised to 3.1%, from 2.8% in March.

• GDP growth forecast for end-2025 cut to 1.4%, from 1.7% earlier.

• Chair Powell says current stance is “modestly restrictive” and appropriate given inflation risks.

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“Dot plot” of rate projections shows the median official expected to lower rates by a half percentage point in 2025, implying two quarter-point cuts this year, the same as they expected in March

Powell said the Fed’s next Powell declined to comment on whether he would remain at the Federal Reserve as a governor after his term as chair ends, saying there was no update on that front at this time.

Ask ChatGPTpolicy moves are likely to be closer to a neutral stance, signaling that future decisions may involve less tightening as inflation cools and economic conditions evolve.

US Federal Reserve Chair Jerome Powell seemed to be opening the doors a bit for a potential rate cut in September, stating that data around the key economic indicators would determine whether the rate-setting panel would resume the cuts.

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