Federal Reserve Keeps Rates Steady, Cites Easing Uncertainty but Persistent Inflation

At its June 17–18, 2025 meeting, the Federal Reserve kept interest rates steady at 4.25–4.5%, maintaining a cautious stance as inflation stayed above target. Policymakers noted stable growth and a 4.2% unemployment rate, with inflation easing to 2.3%. While some officials saw room for rate cuts later in 2025 if inflation cools further, others urged patience amid tariff-related risks. The Fed will continue balance sheet reductions and reaffirmed its goal of returning inflation to 2%.

View Article

*Source: https://lingolandedu.com/en/english-english-dictionary/federal

At its June 17–18, 2025 meeting, the Federal Open Market Committee voted unanimously to keep the federal funds rate in a range of 4.25 to 4.5 percent The vote reaffirmed its cautious stance as inflation remains above the 2 percent target. Policymakers noted that economic growth and the labor market remain solid, with unemployment steady at 4.2 percent and consumer spending showing resilience. Inflation, measured by the personal consumption expenditures index, stood at 2.3 percent in May, down from earlier highs but still elevated. Participants cited easing uncertainty following a pullback in tariff hikes and stronger financial market conditions, though they emphasized that inflation pressures linked to trade and energy costs still pose risks.

The Committee agreed that current policy remains “moderately restrictive” and well positioned to balance inflation control with employment stability. Most participants signaled that rate cuts later in 2025 could be appropriate if inflation continues to cool and labor conditions soften, while some argued for patience given the potential for renewed price pressures from tariffs. The Fed will continue reducing its balance sheet, which would allow up to $5 billion in Treasury securities and $35 billion in agency debt and mortgage-backed securities to roll off monthly. Officials reaffirmed their commitment to returning inflation to 2 percent while remaining prepared to adjust policy if risks to growth or prices intensify.