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The Federal Open Market Committee (FOMC) members and regional Fed presidents maintained their expectations for interest rate cuts this year unchanged, a report by the Federal Reserve showed today, June 18.
The report released on Wednesday following the committee meeting showed that policymakers lowered their forecasts for US economic growth this year, while raising their forecasts for inflation and unemployment.
Policymakers’ rate projections indicate two additional potential rate cuts of 25 basis points each this year. This aligns with their estimates presented in the latest Summary of Economic Projections released in March.
|
Median Fed Member Projections for US Economy (In %) |
||||
|
Indicator |
Expected Date |
2025 |
2026 |
2027 |
|
Real GDP |
June |
1.4 |
1.6 |
1.8 |
|
March |
1.7 |
1.8 |
1.8 |
|
|
Unemployment Rate |
June |
4.5 |
4.5 |
4.4 |
|
March |
4.4 |
4.3 |
4.3 |
|
|
PCE Inflation |
June |
3.0 |
2.4 |
2.1 |
|
March |
2.7 |
2.2 |
2.0 |
|
|
Core PCE Inflation |
June |
3.1 |
2.4 |
2.1 |
|
March |
2.8 |
2.2 |
2.0 |
|
|
Interest Rate |
June |
3.9 |
3.6 |
3.4 |
|
March |
3.9 |
3.4 |
3.1 |
|
These estimates reflect policymakers’ expectations for changes in key economic indicators between the fourth quarter of the target year and the same quarter of the previous year.
The latest data showed that the US unemployment rate held steady at 4.2% in May, while the Personal Consumption Expenditures (PCE) price index reached 2.1% in April, with the core PCE index standing at 2.5% for the same month.
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