June FOMC Meeting Holds Rates Steady, Projects Slower Growth and Sticky Inflation

The Federal Reserve maintained interest rates at current levels during its June FOMC meeting, a MOVE widely anticipated by markets. While the decision itself caused little volatility, the updated Summary of Economic Projections revealed significant shifts in the committee's outlook.

Economic growth forecasts were revised downward, reflecting broader macroeconomic uncertainties. The labor market remains resilient, with only marginal expected increases in unemployment. Notably, the Fed raised its 2025 inflation projection to 3%, citing underestimated tariff impacts as a key risk factor.

Despite these adjustments, the median forecast for rate cuts in 2024 held at two. However, a growing faction within the committee appears to be shifting toward a no-cut scenario for this year.