June 18, 2025
May 07, 2025
Statement·Presser·Minutes·Policy
Jerome H. Powell
June 18, 2025 FOMC Statement
FOMC statement
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EDT
Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further. diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen. mandate.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments 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.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Alberto G. Musalem; Jeffrey R. Schmid; and Christopher J. Waller. Neel Kashkari voted as an alternate member at this meeting.
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Implementation Note issued May 7, June 18, 2025
Our summary
What changed
- The FOMC maintained the federal funds rate target range at 4-1/4 to 4-1/2 percent, with no change to balance sheet reduction plans.
- Language on the unemployment rate shifted from 'stabilized at a low level in recent months' to 'remains low,' simplifying the labor market description.
- The FOMC revised its outlook language, stating uncertainty 'has diminished but remains elevated,' replacing the previous 'increased further' phrasing.
- The sentence noting risks of higher unemployment and higher inflation have risen was removed, leaving only attention to dual mandate risks.
- The voting roster changed: Neel Kashkari no longer voted as an alternate, and Jeffrey R. Schmid joined as a voter.
Implications
The softened uncertainty language and removal of explicit risk escalation suggest the FOMC sees a slightly more balanced outlook, potentially reducing urgency for near-term rate adjustments.
The unchanged rate decision and continued balance sheet runoff indicate policy remains on hold, with markets likely interpreting the diminished uncertainty as a sign of stability in the FOMC's assessment.
Summary generated automatically from the statements. Not investment advice.
Projections
| 2025 | 2026 | 2027 | Longer run | |
|---|---|---|---|---|
| Real GDP growth | 1.4 was 1.7 | 1.6 was 1.8 | 1.8 | 1.8 |
| Unemployment rate | 4.5 was 4.4 | 4.5 was 4.3 | 4.4 was 4.3 | 4.2 |
| PCE inflation | 3.0 was 2.7 | 2.4 was 2.2 | 2.1 was 2.0 | 2.0 |
| Core PCE inflation | 3.1 was 2.8 | 2.4 was 2.2 | 2.1 was 2.0 | |
| Federal funds rate | 3.9 | 3.6 was 3.4 | 3.4 was 3.1 | 3.0 |
Median projections of FOMC participants; previous: March.
Each dot is one participant's projection of the federal funds rate (%) at the end of each year and in the longer run.
June March median March median
Scroll the chart sideways for the later years.
Implementation Note
The settings that put the decision into effect: the interest rate paid on reserves, the FOMC's instructions to the New York Fed's trading desk, and the discount rate. Changes are marked the same way as in the statement.
- The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on reserve balances at 4.4 percent, effective
May 8,June 20, 2025. - As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive: "Effective
May 8,June 20, 2025, the Federal Open Market Committee directs the Desk to: - Undertake open market operations as necessary to maintain the federal funds rate in a target range of 4-1/4 to 4‑1/2 percent.
- Conduct standing overnight repurchase agreement operations with a minimum bid rate of 4.5 percent and with an aggregate operation limit of $500 billion.
- Conduct standing overnight reverse repurchase agreement operations at an offering rate of 4.25 percent and with a per‑counterparty limit of $160 billion per day.
- Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in each calendar month that exceeds a cap of $5 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
- Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage‑backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
- Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons."
- In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve the establishment of the primary credit rate at the existing level of 4.5 percent.
Press conference
June 18, 2025, 2:30 p.m. ET · Read the transcript
What Powell said that the statement didn't
- The chair said the median FOMC participant projects GDP growth of 1.4 percent this year and 1.6 percent next year, slower than the March projections.
- The chair said the median projection for the unemployment rate is 4.5 percent at the end of this year and next, a bit higher than projected in March.
- The chair said the median projection for total PCE inflation is 3 percent this year, falling to 2.4 percent in 2026 and 2.1 percent in 2027.
- The chair said the median projection for the federal funds rate is 3.9 percent at the end of this year, 3.6 percent at the end of next year, and 3.4 percent at the end of 2027.
- The chair said the FOMC intends to wrap up modifications to its Statement on Longer-Run Goals and Monetary Policy Strategy by late summer as part of its five-year framework review.
Summary generated automatically from the transcript and the statement.