Fed officials are growing more optimistic about the economy, projecting lower inflation than in May, according to the minutes of the Federal Open Market Committee (FOMC) meeting on June 17-18. In addition, the Fed’s real GDP growth forecast from 2025 to 2027 is higher than its previous outlook as President Trump’s tariff stance has softened.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
At the same time, the risk of persistent inflation remains a significant concern. “The staff continued to view the risks around the inflation forecast as skewed to the upside, as the projected rise in inflation this year could be more persistent than assumed in the baseline projection,” the minutes stated.
When Will the Fed Cut Rates?
Most Fed officials believe that interest rates should be reduced this year. However, policymakers are split on the timing of the action. At least two officials, Fed Governors Michelle Bowman and Christopher Waller, have called for a July rate cut if inflation remains under control. Other officials believe that rate cuts are appropriate after July, while a third group supports no rate cuts in 2025 in order to combat potential tariff-driven inflation later on in the year.
Stay up-to-date on the federal funds rate and other key economic metrics with TipRanks’ Economic Indicators Dashboard.
