The Federal Reserve kept its key interest rate unchanged at 4.25% – 4.50% on June 18, 2025, while subtly shifting its long-term stance by raising rate projections for 2026 and 2027. Although the near-term policy remains dovish, the updated outlook reflects a more cautious approach to inflation in the years ahead.
As widely anticipated, the FOMC decision maintained the current federal funds rate. However, the updated economic projections suggest a longer-than-expected path toward rate normalization.
📌 Key Changes in Fed Projections:
Although this year’s rate projection remains at 3.9%, the 2026 projection rose to 3.6% from 3.4%, implying that monetary easing may be slower than previously thought.
Market participants were quick to respond to the Fed’s updated tone, though the initial moves remained restrained.
All eyes now turn to Fed Chair Jerome Powell’s press conference, where his tone could significantly influence short-term sentiment. Any additional clarity on inflation risks, labor market dynamics, or the pace of future cuts will be crucial for forex, commodities, and equities alike.
✅ Fed leaves rates unchanged at 4.25%–4.50%, in line with expectations
✅ Inflation projections for 2025 and 2026 revised higher
✅ Fed signals higher long-term interest rates in 2026 and 2027
✅ USD holds steady, gold range-bound, S&P 500 pulls back
✅ Powell’s press conference remains the next volatility trigger
📌 Stay updated with central bank news, live forex insights, and macroeconomic projections at www.DailyForex.pk — your source for financial market coverage in Pakistan and beyond.
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