Fed Expected to Maintain Rates at 4.25%-4.50% in July 2025 Meeting, Market Priced for Pause
The Federal Reserve's July 19, 2025 FOMC meeting is widely anticipated to result in no change to the benchmark interest rate, currently at 4.25%-4.50%. Veteran trader Matthew Dixon's analysis suggests a 96.9% probability of rates holding steady, with only a 3.1% chance of a 25 basis point cut. Market sentiment aligns with this view, as investors appear fully priced for a pause.
Recent shifts in Fed sentiment indicate growing caution among policymakers. While the June 2025 DOT plot maintained projections for two rate cuts this year, seven officials now favor no further reductions—up from four previously. This hesitation reflects persistent concerns about sticky inflation, despite some cooling in headline numbers.