Fed's Powell: Inflation has been running somewhat above goal; says current policy stance leaves us well positioned

In conjunction with the Federal Open Market Committee (FOMC) meeting held on June 17-18, 2025, meeting participants submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year from 2025 to 2027 and over the longer run. Each participant’s projections were based on information available at the time of the meeting, together with her or his assessment of appropriate monetary policy—including a path for the federal funds rate and its longer-run value—and assumptions about other factors likely to affect economic outcomes. The longer-run projections represent each participant’s assessment of the value to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. “Appropriate monetary policy” is defined as the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability. Table 1. Econ FOMC decision: No rate change The median 2025 “dot” is unchanged at two cuts (by the barest possible margin) There’s a bigger crew of policymakers (seven) who penciled in no cuts. pic.twitter.com/uWeKl0bM1U From the SEP: The median core PCE projection for 2025 is 3.1%, but there’s one official that put down 2.5% and three that put down 3.5%. The median number of cuts for 2026 fell to one cut (previously two). No one changed their long-run dot (or if they did, they traded places) https://t.co/cC5vqg7JiQ Fed Projections Indicate 7 Out Of 19 Officials Anticipate No Rate Cuts In 2025, 2 Officials Predict One Cut, 8 Expect Two Cuts, And 2 Foresee Three Cuts Fed Policymakers Predict 1.4% GDP Growth in 2025, Down from 1.7% in March, with Long-Term Growth Steady at 1.8%

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. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. FOMC STATEMENT COMPARE pic.twitter.com/CDPeF3DvRL FED: UNCERTAINTY ABOUT OUTLOOK HAS DIMINISHED, STILL ELEVATED