Federal Reserve Chairman Powell noted that there is no rush to lower interest rates, according to prepared remarks for his appearance before Congress. The rhetoric was consistent with previous remarks by the Chairman, as multiple FOMC members stated that is more prudent to await better understanding of the level of tariffs to be passed by the US government and their impact on the economy before altering key interest rates.
The FOMC left the the federal funds rate unchanged at 4.25%–4.50% for a fourth consecutive meeting in June 2025, in line with expectations. In the Summary of Economic Projections due with the decision, the FOMC maintained the signal of two rate cuts this year, though it anticipates only one quarter-percentage-point in 2026 and 2027. The Fed also downgraded its GDP growth forecast for 2025 to 1.4% (vs 1.7% in March) and for 2026 to 1.6% (vs 1.8%), while leaving the 2027 estimate unchanged at 1.8%.
