News

As anticipated, the Federal Open Market Committee maintained its interest rate target range at 4.25%–4.50% at its July meeting. In a change to its previous statement, the FOMC noted that the growth of economic activity has moderated in the first half of the year. Unlike the June decision, which was unanimous, two FOMC members, Christopher Waller and Michelle Bowman, dissented, desiring to lower the target range by 25 basis points.

In the press conference following the meeting, Federal Reserve Chairman Jerome Powell noted that, despite heightened uncertainty, the economy remains in a solid position and the FOMC is well positioned to respond in a timely way to potential economic developments. Chairman Powell also noted that the underlying composition of price changes has shifted, with increased tariffs pushing up prices in some categories of goods.

The FOMC’s summary of economic projections, which maps out the Federal Reserve’s expectations for where interest rates may be headed in the future, generally is released in conjunction with every other FOMC meeting. Since the June meeting included a release of economic projections, there was not a release in conjunction with the July FOMC meeting. The June summary signaled a marginally more hawkish stance than the March summary. Seven Federal Reserve officials project there will be no rate cuts in 2025, while eight anticipate 50 basis points worth of cuts across 2025. Furthermore, the projections show officials expect inflation and unemployment to rise more than they expected in March.