On June 18, 2025, the US Federal Reserve (Fed) decided to keep the key interest rate unchanged once again. The interest rate remains in the range of 4.25 to 4.50 percent, marking the fourth consecutive meeting where this level is maintained. This decision comes as little surprise and reflects the Fed’s cautious stance, which is not influenced by external pressure or political criticism.
Background and Significance
Expectations and Market Reactions
Analysts and economists largely expected the key interest rate to remain stable. However, there is still the possibility of interest rate cuts later in the year, especially if economic conditions and inflation data develop accordingly.
Political Influences
The Fed is under political pressure, particularly from President Trump, who has repeatedly called for lower interest rates. Nevertheless, Fed Chair Jerome Powell has made it clear that the independence of the central bank is preserved.
Economic Implications
A stable key interest rate can provide security to various market participants but also has significant impacts on investments and economic growth. While stable rates can encourage investments, interest rate increases serve as a means of controlling inflation.
Future Interest Rate Meetings
The Fed has further meetings scheduled, including on July 30, September 17, October 29, and December 10, where there is room for potential adjustments to the interest rate policy.
Outlook
The Fed’s current decision underscores its strategy to closely monitor economic conditions and adjust monetary policy as needed. While some experts expect interest rate cuts, this depends on economic and inflation-related developments. Investors should remain vigilant for possible changes in interest rate policy that could impact markets and investments.