{"id":856576,"date":"2025-06-19T09:11:40","date_gmt":"2025-06-19T14:11:40","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/06\/19\/us-federal-reserve-leaves-its-key-rate-unchanged-but-sees-two-cuts-this-year\/"},"modified":"2025-06-19T09:11:40","modified_gmt":"2025-06-19T14:11:40","slug":"us-federal-reserve-leaves-its-key-rate-unchanged-but-sees-two-cuts-this-year","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/06\/19\/us-federal-reserve-leaves-its-key-rate-unchanged-but-sees-two-cuts-this-year\/","title":{"rendered":"US Federal Reserve leaves its key rate unchanged but sees two cuts this year"},"content":{"rendered":"

Home<\/a><\/span>World News<\/a><\/span>US Federal Reserve leaves its key rate unchanged but sees two cuts this year<\/span><\/p>\n

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The Fed kept its key rate unchanged for the fourth straight meeting Wednesday (June 18), and said the economy is expanding at \u201ca solid pace.\u201d Changes to the Fed\u2019s rate typically \u2014 though not always \u2014 influence borrowing costs for mortgages, auto loans, credit cards, and business loans.<\/h2>\n<\/p>\n
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\"Profile<\/p>\n

By AP\u00a0<\/span>June 19, 2025, 12:12:47 AM IST (Published)<\/span><\/span><\/p>\n<\/div>\n

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\"US<\/p>\n

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US Federal Reserve officials expect inflation to worsen in the coming months, but they still foresee two interest rate cuts by the end of this year, the same as they projected in March.<\/p>\n

\nThe Fed kept its key rate unchanged for the fourth straight meeting Wednesday (June 18), and said the economy is expanding at \u201ca solid pace.\u201d Changes to the Fed\u2019s rate typically \u2014 though not always \u2014 influence borrowing costs for mortgages, auto loans, credit cards, and business loans.<\/p>\n

\nThe central bank also released its latest quarterly projections for the economy and interest rates. It expects noticeably weaker growth, higher inflation, and slightly higher unemployment by the end of this year than it had forecast in March, before President Donald Trump announced sweeping tariffs on April 2.<\/p>\n

Also Read: US jobless claims stabilise near highest levels this year<\/a><\/strong><\/p>\n

\nMost of those duties were then postponed until April 9. The Fed also signalled that it would cut rates just once in 2026, down from two cuts projected in March.<\/p>\n

\nFed officials see inflation, according to its preferred measure, rising to 3% by the end of this year, from 2.1% in April. It also projects the unemployment rate will rise to 4.5%, from 4.2% currently. Growth is expected to slow to just 1.4% this year, down from 2.5% last year.<\/p>\n

\nDespite the gloomier outlook, Fed chair Jerome Powell and other officials have underscored that they are holding off from any changes to their key rate because of the uncertainty surrounding the impact of the tariffs and economic outlook.<\/p>\n

\nSome of the Fed\u2019s policymakers have expressed particular concern that the duties could boost prices, creating another surge of inflation just a couple of years after the worst inflation spike in four decades. Many economists say that without the higher import taxes, the Fed would likely be cutting its rate further.<\/p>\n

Also Read: Trump’s ‘Made in America’ smartphone likely to be built in China, say experts<\/a><\/strong><\/p>\n

\nYet so far, inflation has cooled this year to just 2.1% in April, essentially back at the central bank\u2019s target of 2%. Core inflation, which excludes the volatile food and energy categories, remains elevated at 2.5%.<\/p>\n

\nTrump has pointed to the mild inflation figures to argue that the Fed should lower borrowing costs and has repeatedly criticised Powell for not doing so. On Wednesday, he called Powell \u201cstupid\u201d and accused him of being \u201cpolitical\u201d for not cutting rates.<\/p>\n

\nTrump has previously argued that a rate cut would boost the economy. Now his focus has shifted to the federal government\u2019s borrowing costs, which have shot higher since the pandemic, with interest payments running at an annual rate of more than $1 trillion.<\/p>\n

\nPushing the Fed to cut rates simply to save the government on its interest payments typically raises alarms among economists, because it would threaten the Fed\u2019s congressional mandate to focus on stable prices and maximum employment.<\/p>\n

Also Read: US judge blocks Trump passport policy targeting transgender people<\/a><\/strong><\/p>\n

\nOne of Trump\u2019s complaints is that the Fed isn\u2019t cutting rates even as other central banks around the world have reduced their borrowing costs, including in Europe, Canada, and the U.K. On Tuesday, the Bank of Japan kept its key short-term rate unchanged at 0.5%, after actually raising it recently.<\/p>\n

\nBut the European Central Bank, Bank of Canada, and Bank of England have reduced their rates this year in part because U.S. tariffs are weakening their economies. So far, the US economy is mostly solid, with the unemployment rate low.<\/p>\n

\nThe Bank of England has cut its rate twice this year but is expected to keep it unchanged at 4.25% when it meets on Thursday.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

Read More<\/a>
\n Jomy Jos Pullokaran<\/p>\n","protected":false},"excerpt":{"rendered":"

Home World News US Federal Reserve leaves its key rate unchanged but sees two cuts this year The Fed kept its key rate unchanged for the fourth straight meeting Wednesday (June 18), and said the economy is expanding at \u201ca solid pace.\u201d Changes to the Fed\u2019s rate typically \u2014 though not always \u2014 influence borrowing<\/p>\n","protected":false},"author":1,"featured_media":856577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[342,24217],"tags":[],"class_list":{"0":"post-856576","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-federal","8":"category-reserve"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/856576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=856576"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/856576\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/856577"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=856576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=856576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=856576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}