The recent decisions and forecasts of the US Federal Reserve (Fed) on Wednesday, June 18, 2025, had little impact on the prices at Wall Street. This suggests an uncertain market situation. The Fed decided to keep the key interest rate in the current range of 4.25% to 4.50%.
Expectations for the Fed
In particular, the markets had been waiting for statements from Fed Chairman Jerome Powell and the so-called Dot Plot. These are important clues for possible interest rate cuts in September, but the signals largely remained unchanged. As a result, stock prices remained almost unmoved.
Economic Forecast and Market Outlook
In its quarterly economic forecast, the Fed shows a more restrictive stance. For 2025, it expects a total of two interest rate cuts but simultaneously predicts higher inflation and unemployment compared to forecasts made three months ago. The preferred PCE price index is expected to be around 3% by the end of the year and to decrease to about 2.4% in the following year. The unemployment rate is projected to rise to about 4.5% this year.
These cautious forecasts also reflect uncertainties, such as political measures like tariffs that could weaken economic growth. Accordingly, investor sentiment remains cautious.
In summary, the current Fed decisions with unchanged interest rates as well as cautious economic outlooks contribute to stagnating prices at Wall Street. These developments highlight a phase of increased uncertainty in the market.