Federal Reserve leaves interest rates unchanged despite Trump pressure

The Federal Reserve on Wednesday said that it will leave its benchmark interest rate unchanged following its June monetary policy meeting as policymakers continue to monitor inflation and labor market data amid elevated economic uncertainty.

The central bank’s decision leaves the benchmark federal funds rate at a range of 4.25% to 4.5%.

It comes after the Fed left rates at that level at its three prior meetings in January, March and May. The central bank cut rates at its final three meetings last year, which involved a 50-basis-point cut in September and a pair of 25-basis-point reductions in November and December.

The Federal Open Market Committee (FOMC), which guides the central bank’s monetary policy moves, noted in its announcement that, “Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.”

“The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated,” the FOMC statement noted. Policymakers added that uncertainty about the economic outlook “has diminished but remains elevated” and that the Fed is “attentive to the risks to both sides of its dual mandate,” which is to pursue maximum employment and stable prices with long-run inflation at 2%.

FOMC policymakers also released a summary of economic projections, known as the so-called “dot plot,” which showed members see two interest rate cuts in 2025, followed by one cut each in 2026 and 2027. 

They also project PCE inflation will rise to 3% this year before declining to 2.4% in 2026 and 2.1% the following year. Real gross domestic product (GDP) is seen as slowing to 1.4% in 2025 before growth picks up to 1.6% next year and 1.8% in 2027. Unemployment is seen as rising to 4.5% in 2025 and 2026, before dipping to 4.4% in 2027.

This is a developing story. Please check back for updates.