Most Fed officials considered a reduction in the fed funds rate likely to be appropriate at some point this year, noting that upward pressure on inflation from tariffs may be temporary or modest, that medium- and longer-term inflation expectations had remained well anchored, or that some weakening of economic activity and labor market conditions could occur, minutes from the last FOMC meeting in June showed.
However, while a few participants suggested that a rate cut could occur as early as the next meeting, others argued that no reductions should take place this year.
Meanwhile, policymakers highlighted that uncertainty about the outlook was elevated due to trade policy, other government policies, and geopolitical risks, but that overall uncertainty had diminished since the previous meeting.
The Fed left the federal funds rate unchanged at 4.25%–4.50% for a fourth consecutive meeting in June 2025, as it waits for more clarity on the outlook for inflation and economic activity.
source: Federal Reserve
