Following its latest Federal Open Markets Committee (FOMC) meeting on June 18, the U.S. Federal Reserve expectedly kept its benchmark interest rate unchanged again as it awaits the fallout of trade policy and a clearer direction of the U.S. economy amidst tariff impacts.

But, the central bank reiterated that it expects to make two rate cuts in the second half of 2025.

For now, it leaves the Fed rate at 4.25% to 4.5%. It was the third straight hold on the borrowing interest rate after the central bank enacted three cuts to it over the final four months of 2024.

source: tradingeconomics.com

In a FOMC statement following its meeting, the Fed stated: “Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”

According to the Fed’s “Dot Plot” matrix showing how each of its seven governors forecast interest rates to proceed, it averages out to two rate cuts this year — the same as in the gorup’s previous forecast — but it now shows only one rate cut expected in 2026, compared to two previously.

For the remainder of 2025, Fed officials project a pair of cuts this year that would lower the rate to a range of 3.75% to 4%.

Just hours earlier, President Trump voiced that the Fed should cut rates by 2-2.5 percentage points and called Fed Chairman Jerome Powell “stupid” while insisting there is no inflation impact on the U.S. economy.