Economic uncertainty and the risk of inflation have kept the Fed at bay in its monetary policy decisions. According to a Reuters poll of 105 economists, 59 of them, or 56%, expect the Fed to reduce the federal funds rate in September. The Fed will likely hold the rate steady between 4.25% and 4.50% at its upcoming meeting on June 17 and 18, with 103 economists in favor.
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“High tariffs are here to stay, and they will produce elevated inflation that is sustained well into 2026,” said BNP Paribas Chief U.S. Economist James Egelhof.
Trump Calls for 1% Rate Cut
Last week, President Trump urged Fed Chair Jerome Powell to slash the federal funds rate by 1% following a better-than-expected jobs report. However, that likely won’t be the case, as 85 economists expect the rate to be in a range of at least 3.75% and 4.00% by the end of 2025. In addition, 20 economists believe that the rate will remain unchanged for the rest of the year. A lower rate allows corporations to borrow at lower costs, supporting corporate growth and earnings.
Head over to TipRanks’ Economic Indicators Dashboard to view the federal funds rate and other key economic metrics.
