June FOMC Shockwaves: 3 Key Takeaways That’ll Move Your Money
The Fed just dropped a monetary policy grenade—here's where the shrapnel landed.
Rate Cuts? More Like Rate Teases
Powell's crew left rates unchanged but winked at future cuts. Classic Fed move: promise jam tomorrow while serving stale bread today.
Balance Sheet Ballet
Quantitative tightening gets a cautious slowdown. Because nothing says 'confidence' like easing off the brakes at 2 mph.
Dot Plot Drama
Those infamous projections show more dissent than a crypto Twitter thread. Even central bankers can't agree on where this train's headed.
Bottom line: The Fed's still trying to have its cake and eat your 2% inflation target too. Meanwhile, Bitcoin's like: 'LOL, hard cap at 21 million.'
More notably, the updated Summary of Economic Projections was substantial compared to the last update in March.
Considering how much has changed since March (Liberation Day and an emerging war with Iran, to name a few things), it’s no surprise to see a significant change in the ways FOMC members see the economy evolving.
Based on the table below, we can surmise that:
- The FOMC sees growth slowing more than what committee members expected in March.
- The FOMC expects the unemployment rate to tick up marginally but they’re still not concerned about the labor market.
- The committee further ratcheted up their inflation forecast for 2025 from 2.7% to 3%, noting the risk of tariffs being larger than what they expected.
Interestingly, the one thing the FOMC did not change is how many rate cuts they expect to enact this year.
The number remained at two by year-end. However, beneath the surface, we actually saw more FOMC members move toward no cuts for this year — just enough to move the market on the median projection:
Overall, the theme of the June meeting was a Fed truly committed to doing as little as possible.
With a five-year monetary policy framework review underway, a Fed chair’s term ending in 2026, uncertainty around tariffs, a potential oil shock from the Middle East and a US president demanding the Fed cut rates by at least 200 basis points, it appears Powell’s main goal is just to get to the end of his term in one piece.
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
