At its scheduled Federal Open Market Committee (FOMC) meeting on June 18th, the US Federal Reserve announced that it will maintain the target range for the federal funds rate at 4.25% to 4.50%.

The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion.

Despite fluctuations in net exports, recent indicators suggest that the economy is expanding at a solid pace. The FOMC released their projections for real GDP growth, unemployment rate and inflation for 2025-2027. GDP is projected to grow 1.4% in 2025 and 1.6% in 2026, revised down from March projections, and at 1.8% in 2027. Unemployment rate is forecasted to be at 4.5% in 2025 and 2026 and at 4.4% in 2027, revised up from March projections. PCE inflation was projected to grow at 3.0% in 2025, 2.4% in 2026, and 2.1% in 2027, revised up. Core inflation was also revised up to 3.1% in 2025, 2.4% in 2026, and 2.1% in 2027.

The Committee seeks to achieve maximum employment and returning inflation to 2% over the long run. The Committee will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments to achieve its goals.

The next scheduled FOMC meeting will be held on July 29-30, 2025.

Source: US Federal Reserve, FOMC Press Release; FOMC Summary of Economic Projections