MARKETS WATCHING SEPTEMBER MEETING
The Fed’s guidance lines up with market expectations for a potential rate cut at its next key policy meeting in September. Still, the central bank has resisted mounting pressure from US President Donald Trump, who on Wednesday renewed his attacks on Fed Chair Jerome Powell, calling him “stupid” and demanding a sharp rate cut.
The Fed has not committed to a fixed timeline for cutting rates, citing lingering uncertainty over the Trump administration’s tariff policies, and the challenge of gauging how higher import taxes may affect consumers, supply chains, and producer costs.
While inflation is forecast to gradually decline, to 2.4% in 2026 and 2.1% in 2027, the pace is slower than earlier hoped. Meanwhile, unemployment is expected to climb to 4.5% by year-end, up from March’s 4.4% forecast and above May’s 4.2% rate.
Still, the Fed noted that “the unemployment rate remains low, and labor market conditions remain solid,” suggesting no immediate alarm from policymakers.
NO MENTION OF IRAN-ISRAEL CONFLICT
The Fed made no reference to the ongoing conflict between Israel and Iran, which has stirred concerns over oil prices and broader global market risks. Chair Powell is expected to address geopolitical tensions and elaborate on the Fed’s outlook during a press conference at 2:30pm EDT (1830 GMT).
The decision was unanimously approved by members of the Federal Open Market Committee.
