FOMC Outlook: The Federal Reserve is expected to remain steady, with multiple factors influencing the direction of the Intrerest Rate policy.

On June 19th (Thursday) at midnight, the Federal Open Market Committee (FOMC) of the Federal Reserve will announce the interest rate decision. The market widely expects the Federal Reserve to keep the federal funds rate unchanged in the range of 4.25%-4.5%.

This expectation is based on the complexity of the current US economic data and policy environment. Although there are signs of a cooling labor market, it has not yet significantly deteriorated; inflationary pressures have eased somewhat but remain above target levels. At the same time, geopolitical tensions and uncertainties regarding tariff policies have added more considerations to the Federal Reserve's decision-making.

Although the market generally expects the Federal Reserve to remain unchanged, the future policy path is still influenced by multiple factors.

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According to the dot plot from the March FOMC meeting, most members expect two 25 basis point rate cuts by the end of 2025, although the latest forecasts may be adjusted. The Federal Reserve is expected to lower its economic growth forecast for 2025 while raising its inflation and unemployment expectations. The market generally believes that the Federal Reserve may cut rates by 25 basis points in September and December, but if economic data performs better than expected, rate cut expectations may be retracted.

The Trump administration has recently pressured the Federal Reserve multiple times to cut interest rates, claiming that high rates are harming the U.S. economy. However, Federal Reserve Chairman Powell has repeatedly reaffirmed the independence of the policy, emphasizing that its decisions will be based on economic data rather than political pressure.

San Francisco Fed President Daly believes the current policy is "good," and that inflation will continue to decline, but it requires time. Meanwhile, Dallas Fed President Logan feels that the effects of Trump's policies will take time to manifest, and it may be necessary to maintain the Intrerest Rate for a longer period.

In summary, the Federal Reserve is highly likely to remain unchanged in June, but multiple complex factors will influence its future decisions, especially the uncertainties of geopolitical issues and tariff policies. Investors need to closely monitor Powell's press conference statements to assess the interest rate cut path and economic outlook.

#FOMC # Interest Rate Cut Expectations #Federal Reserve