The Federal Reserve is expected to hold interest rates steady on Wednesday between 4.25% and 4.5%, according to market predictions. This decision comes after the Fed’s May meeting, when traders had already predicted a stable rate stance.
As of Tuesday afternoon, there was only a 55% chance that the Fed would cut its interest rate in September, according to the CME FedWatch tool. The Fed has signaled no plans to lower rates until its Sept. 17 meeting, which means short-term interest rates are unlikely to decline for at least three months.
President Donald Trump’s tariff proposals have put the Fed in a difficult position. With inflation moderating but consumer prices potentially rising, the Fed aims to keep inflation steady at around 2% while maintaining employment levels.
Fed Chair Jerome Powell has expressed caution about the uncertainty surrounding tariffs and their impact on the economy. The Fed is closely monitoring inflation data, which ticked up slightly in May to 2.4%, and is keeping a close eye on consumer prices.
The Fed’s interest rate decisions have already had an impact on credit card and auto loan rates. Higher mortgage rates are also affecting housing markets, with rates now more than double what they were in 2021.
Despite uncertainty surrounding tariffs, the Fed appears to be committed to stability for now. With no clear indication that rates will change soon, investors can expect a steady rate stance from the Fed.
Source: https://eu.usatoday.com/story/graphics/2025/06/17/fed-interest-rates-predictions/84244079007