Fed Decisions
The recent decisions and forecasts of the US Federal Reserve (Fed) on Wednesday, June 18, 2025, showed little impact on Wall Street. This is noteworthy as the Fed’s monetary policy traditionally has a direct influence on the markets.
Interest Rate Decision
The Fed kept the interest rate unchanged at a level of 4.25 to 4.5 percent. This decision was in line with the expectations of most analysts and contrasted with the calls from US President Donald Trump, who had requested a reduction in interest rates.
Future Interest Rate Cuts
The Fed signaled that two interest rate cuts are possible this year. This willingness could indicate that the Fed wants to adjust its monetary policy to sustainably support economic growth.
Fed Forecasts
Economic Growth and Inflation
The forecasts for economic growth were lowered to 1.4 percent, a downward adjustment from previous estimates of 1.7 percent. At the same time, the Fed expects an inflation rate of 3.0 percent, which could influence future interest rate decisions.
Market Reactions
Although the stability of the interest rate was largely expected, the indicated future interest rate cuts could provide long-term positive market impulses through investment incentives.
Political Aspects
The decision to keep the interest rate unchanged continues to cause tensions between the Fed and President Trump, who questions the independence of the central bank and has criticized Fed Chair Jerome Powell.