Fed's Powell: Goods inflation moving up a bit, expect to see more of that in summer

In conjunction with the Federal Open Market Committee (FOMC) meeting held on June 17-18, 2025, meeting participants submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year from 2025 to 2027 and over the longer run. Each participant’s projections were based on information available at the time of the meeting, together with her or his assessment of appropriate monetary policy—including a path for the federal funds rate and its longer-run value—and assumptions about other factors likely to affect economic outcomes. The longer-run projections represent each participant’s assessment of the value to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. “Appropriate monetary policy” is defined as the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability. Table 1. Econ FOMC decision: No rate change The median 2025 “dot” is unchanged at two cuts (by the barest possible margin) There’s a bigger crew of policymakers (seven) who penciled in no cuts. pic.twitter.com/uWeKl0bM1U From the SEP: The median core PCE projection for 2025 is 3.1%, but there’s one official that put down 2.5% and three that put down 3.5%. The median number of cuts for 2026 fell to one cut (previously two). No one changed their long-run dot (or if they did, they traded places) https://t.co/cC5vqg7JiQ Fed Projections Indicate 7 Out Of 19 Officials Anticipate No Rate Cuts In 2025, 2 Officials Predict One Cut, 8 Expect Two Cuts, And 2 Foresee Three Cuts Fed Policymakers Predict 1.4% GDP Growth in 2025, Down from 1.7% in March, with Long-Term Growth Steady at 1.8%

Fed's Powell: If just look backward at data, you would want rates closer to neutral. But we expect a meaningful amount of inflation in coming months. Fed's Powell: We will make a smarter decision if we wait a couple of months. FED'S POWELL: ECONOMY HAS BEEN RESILIENT, PART OF THAT IS OUR STANCE || SAYS NOT THINKING ABOUT OWN FUTURE AFTER CHAIR TERM ENDS POWELL: SUPPLY AND DEMAND IN LABOR MARKET HAVE KEPT UNEMPLOYMENT RATE IN REASONABLE PLACE Fed's Powell: Compared to September 2024, when we cut rates, inflation forecast for the current year is for higher inflation from tariffs.

FED'S POWELL Q&A: RATES 'ARE NOT VERY HIGH;' POLICY 'MODESTLY RESTRICTIVE' AND WITHOUT TARIFFS COULD ANTICIPATE MORE PROGRESS; WAITING TO SEE #FOMC #FederalReserve #economy FED'S POWELL: WILL TAKE CONFIDENCE THAT INFLATION IS COMING DOWN; WITHOUT TARIFFS, THAT CONFIDENCE WOULD BE BUILDING || SAYS HARD TO KNOW HOW WE SHOULD REACT UNTIL WE SEE THE SIZE OF THE TARIFF EFFECTS Fed's Powell: The labor market is not crying out for a rate cut. FED'S POWELL: NOT CONCERNED WE CAN'T DO OUR JOBS WITH THE DATA WE HAVE || SAYS HAVING REALLY GOOD DATA IS A HUGE PUBLIC GOOD Powell: Of course, the Fed is watching the Israel-Iran conflict. We possibly will see higher energy prices, but don't generally tend to have lasting effects on inflation.