The Federal Reserve is set to maintain its benchmark interest rate steady at its upcoming meeting on June 17-18. According to the CME Group’s FedWatch Tool, there is a likelihood of 99.9% that the Fed will keep the federal funds rate at its current range of 4.25% to 4.5%. This decision reflects the Fed’s cautious approach to adjusting interest rates amidst ongoing economic uncertainty.
The benchmark interest rate has been stable since December, and the Fed has held off on cutting rates despite President Trump’s public urging for lower interest rates. The unemployment rate remains strong, with payroll gains exceeding economists’ expectations last month. However, consumer sentiment has not fully recovered from the impact of President Trump’s tariffs.
A unanimous decision by the FOMC would mark a shift from May’s meeting, when all 12 members voted to hold the benchmark rate steady. Economist predictions suggest a high probability of maintaining the current interest rate range, with only a 2.5% chance of a rate cut.
For savers, holding rates steady is good news, as it means higher interest rates on savings accounts and CDs. However, borrowers should expect credit card rates to remain high, hovering around over 20%. A potential Fed rate cut in the future could have a positive impact on mortgage rates, but this is not guaranteed.
Source: https://www.cbsnews.com/news/fed-rate-decision-wednesday-june-powell