Fed members believe interest rates will be cut in 2025 amidst pressure

In the United States, the Federal Open Market Committee met on June 17-18, 2025, and decided to maintain interest rates in the 4.25% to 4.5% range that had been in place since December 2024. Policymakers assessed the economic landscape, acknowledging that while inflation remained above target, the job market was stable, with unemployment rates holding between 4.0% and 4.2%. Despite pressures from President Donald Trump, who advocated for rate cuts to help reduce government debt servicing costs, most Fed members indicated that they do not foresee immediate cuts. Nonetheless, there is a general expectation that the Fed will lower rates in subsequent months, particularly if inflation remains subdued or employment risks emerge. Furthermore, the presence of tariffs complicates the decision-making process, and many in the committee anticipate that tariffs could have lasting effects on inflation. Thus, while immediate rate cuts are not anticipated at the July meeting, the Fed may signal its willingness to consider them later in the year depending on economic indicators. Central bank officials are very aware that their decisions are influenced by the White House's demands and the precarious nature of economic factors, which are further affected by uncertain trade policies with various countries, especially as tariffs come into play.