The June Fed meeting kicks off next Tuesday, June 17, and concludes on Wednesday, June 18, with the central bank's latest policy decision.
The Federal Open Market Committee (FOMC) is not expected to cut interest rates this time around, but the central bank will release its Summary of Economic Projections (SEP), or "dot plot," which will show where it expects the federal funds rate to be at the end of this year.
Wall Street will also look to the FOMC statement and Federal Reserve Chair Jerome Powell's press conference to see how President Donald Trump's tariff policies could impact the central bank's decisions moving forward.
The Kiplinger team is reporting live on the June Fed meeting, bringing you the news and our expert analysis of what it could mean for the economy. Scroll for the latest updates.
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President Trump's tariff policies have yet to impact inflation
Inflation eased more than expected in May, according to the Bureau of Labor Statistics.
Headline CPI was up 0.1% month over month in May, slower than April's 0.2% rise and the 0.2% increase economists expected.
The CPI was 2.4% higher year over year, slightly higher than the 2.3% increase seen the month prior and in line with economists' projections.
Shelter was the "primary factor" for the increase in headline CPI, according to BLS, up 0.3% on the month. Energy costs, meanwhile, were down 1% in May as gas prices declined.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, was up 0.1% from April to May and 2.8% year over year. Economists expected 0.3% and 2.9% increases, respectively.
The May CPI report, alongside news that the U.S. and China have reached a trade deal, is doing little to move the needle on rate-cut expectations.
According to CME FedWatch, futures traders are pricing in a 99.9% chance the central bank will hold rates steady, with the first quarter-point rate cut not expected until September.
- Karee Venema
The labor market remains resilient
The Federal Reserve has a dual mandate of price stability and maximum employment – and both sides appear to be on solid footing at the moment.
Indeed, while the May Consumer Price Index signaled progress on the inflation front, the most recent jobs report showed a resilient labor market.
According to the Labor Department, the U.S. added 139,000 new jobs last month, more than economists expected. And while figures for March and April were revised down, the unemployment rate remained at a historically low 4.2%.
"It's clear that the economy remains resilient, with the job market holding up well," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
The CIO added that the Fed "should be reluctant to cut rates because the full effects of tariffs haven't impacted inflation numbers yet and the job market isn't deteriorating enough to force their hand."
- Karee Venema
When is Jerome Powell's term as Fed chair up?
Despite President Trump's innuendos that he would like to fire Fed Chair Jerome Powell, the Supreme Court has suggested that it would oppose such an action.
Indeed, Trump in April used his Truth Social platform to call for Powell's termination, while an April 17 report in The Wall Street Journal discussed private meetings where the president expressed his desire to remove the Fed chair from his post.
Nevertheless, the question of whether or not Trump can fire Powell is seemingly moot given that his term as Fed chair is up in less than a year from now – on May 15, 2026.
It's unlikely that those in Trump's inner circle will encourage him to disrupt the status quo – and likely send stocks and bonds tumbling – when Powell has such a small amount of time left in his term.
For what it's worth, Powell's term as a member of the Board of Governors of the Federal Reserve ends on January 31, 2028.
- Karee Venema
How long will we have to wait for a Fed rate cut?
The Federal Reserve is not going to change rates at its June 17-18 meeting next week. In fact, don't expect the central bank to make any adjustments until maybe its October meeting.
The Fed wants to know how tariffs are affecting both inflation and the economy. Until the impact is clearer, the Fed will wait.
Yes, that raises the risk that the Fed will act too late, but it may be better to wait at the crosswalk than to look the wrong way crossing the street.
- David Payne
Who gets to vote on Fed policy?
The Federal Open Market Committee (FOMC), which is the Federal Reserve's policy-setting group, has 12 members, eight permanent and four who rotate each year.
The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.
Four regional Fed presidents are rotated in each calendar year.
The 2025 FOMC voting committee consists of:
- Fed Chair Jerome Powell
- Vice Chair Philip Jefferson
- Fed Governor Michael Barr
- Fed Governor Michelle Bowman
- Fed Governor Lisa Cook
- Fed Governor Adriana Kugler
- Fed Governor Christopher Waller
- New York Fed President John Williams
- Boston Fed President Susan Collins
- Chicago Fed President Austan Goolsbee
- St. Louis Fed President Alberto Musalem
- Kansas City Fed President Jeffrey Schmid
In 2026, the presidents from Cleveland, Philadelphia, Dallas and Minneapolis will rotate in as FOMC voting members, according to the Federal Reserve.
- Karee Venema
Wholesale prices rose less than expected in May
Wall Street continues to be met with encouraging inflation data, indicating that President Trump's aggressive tariff policies have yet to impact price growth.
Ahead of Thursday's open, data from the Bureau of Labor Statistics showed that the Producer Price Index (PPI), which measures what businesses are paying suppliers for goods, was up 0.1% month over month in May.
While this was quicker than the revised 0.2% decline seen in April, it was slower than the 0.2% rise economists expected.
Year over year, wholesale prices rose 2.6%, in line with expectations.
Core PPI, which excludes volatile food and energy costs, was up 0.1% on a monthly basis and 3.0% higher year over year.
Economists had called for core PPI to increase 0.3% and 3.1% monthly and yearly, respectively.
These soft back-to-back readings on inflation give "the Fed room to sit on their hands," says Chris Zaccarelli, chief investment officer for Northlight Asset Management.
"As long as inflation isn’t increasing – or even better, is decreasing – the Fed can be patient and wait for more information on how the new tariffs and trade negotiations are going to impact the price stability part of their dual mandate later this year," he adds.
- Karee Venema
What is the FOMC meeting schedule?
The Federal Open Market Committee meets eight times a year, or about once every six weeks. The FOMC is required to meet at least four times a year and may convene additional meetings if necessary.
The convention of meeting eight times per year dates back to the market stresses of 1981.
FOMC meetings last two days and conclude with the committee releasing its policy decision at 2 pm Eastern time. The Fed chair then holds a press conference at 2:30 pm.
Pro tip: As closely scrutinized as the FOMC statement might be, market participants are usually even more keen on what the Federal Reserve chair has to say in the press conference.
Read more: When Is the Next Fed Meeting?
Jobless claims hold steady
The Labor Department said Thursday that initial jobless claims held steady at 248,000 in the week ending June 7, higher than the 242,000 economists expected.
The four-week moving average rose by 5,000 to 240,250. "This is the highest level for this average since August 26, 2023 when it was 245,000," according to the Labor Department.
Bill Adams, chief economist at Comerica, says that while this report shows the labor market is softening, the data are not so clear-cut.
"While the Department of Labor tries to adjust the claims data for seasonal variations, that’s easier said than done," Adams notes. "Initial and continued claims are up from the spring, but both rose from spring to summer in 2023 and 2024 as well."
The difference between now and then, the economist explains, is that in 2025, folks who have lost their jobs are having a harder time finding a new one.
- Karee Venema
A "shadow" Fed chair?
Bloomberg reports President Donald Trump is considering Treasury Secretary Scott Bessent – amid his tariffs-and-trade war star ascension – to be the next Federal Reserve chair.
Jerome Powell, the current Fed chair, presumably will be in charge of things at 20th Street and Constitution Avenue in Washington, D.C., through May 15, 2026.
And yet the primary occupant at 1600 Pennsylvania Avenue continues to do his very best to get Powell to cut interest rates.
Markets have been wary of President Trump's attempts to compromise the independence of the central bank for evermore.
And Bessent, before he was even a nominee for a cabinet position, detailed for Barron's a plan to work around Powell.
"You could do the earliest Fed nomination and create a shadow Fed chair," Bessent said in an interview published October 9. "And based on the concept of forward guidance, no one is really going to care what Jerome Powell has to say anymore."
Perhaps Bessent is the change Trump has been waiting for…
- David Dittman
Trump, Vance pile up on Powell
President Trump turned his ire toward Jerome Powell again on Thursday, calling the Fed chair a "numbskull" for not cutting interest rates.
The president said the U.S. could save $600 billion a year if the FOMC lowered the federal funds rate by 2 percentage points, but they "can't get this guy to do it."
Trump added that he "may have to force something" if inflation keeps falling and the Fed remains on the sidelines.
This follows Wednesday's comments from Vice President J.D. Vance, who wrote in a post on X that "the refusal by the Fed to cut rates is monetary malpractice."
Throughout his tenure, Powell has been adamant about the Fed's independence and told President Trump when they met in May that the central bank would make monetary policy decisions "based solely on careful, objective and non-political analysis."
- Karee Venema
S&P 500 nears record high ahead of the Fed meeting
Stocks closed higher Thursday, bringing the S&P 500 closer to record-high territory. The broad-market index settled at 6,045.26 on June 12, putting it less than 2 percentage points away from surpassing its all-time closing high of 6,144.15 from February 19.
The fact that we're even talking about record highs for the stock market is fairly remarkable considering stocks were flirting with a new bear market back in April after President Trump's aggressive retaliatory tariffs sparked a major sell-off.
Since April 8, the S&P 500 is up more than 21% and is now nearly 3% higher for the year to date.
"The return of cyclical leadership and broad participation since the April 8 low provides additional technical evidence of a sustainable recovery," says Adam Turnquist, chief technical strategist for LPL Financial.
Turnquist says "bullish but not overbought momentum, relatively light investor positioning, and sanguine but not stretched investor sentiment" suggests that this rally has legs.
- Karee Venema
Stock futures drop after Israel attacks Iran
Global equity markets are falling Friday after Israel launched airstrikes on Iran overnight, killing the head of the Islamic Revolutionary Guard Corps and hitting several nuclear facilities.
The strikes will continue "for as many days as it takes," said Israeli Prime Minister Benjamin Netanyahu, in order to "roll back [Iran's] uranium threat."
President Trump warned that these additional strikes "could be more brutal," and encouraged Iran to make a deal with Israel "before there is nothing left."
But Ayatollah Ali Khamenei, Iran's supreme leader, said that Israel "should anticipate a harsh punishment."
At last check, futures on the Dow, S&P 500 and Nasdaq were all down roughly 1%. Oil futures, meanwhile, were 8% higher at last check to trade near their highest level since early 2025.
While Israel's attack on Iran is unlikely to alter the Fed's decision next week, the central bank will certainly be watching the jump in oil prices and its impact on inflation.
- Karee Venema
Tariffs could lift inflation to 3%, Yellen says
Former Treasury Secretary Janet Yellen talked tariffs in an appearance on CNBC's "Money Movers."
Yellen, who preceded Jerome Powell as Fed chair, said that she expects the annual inflation rate to be "at least 3%" at the end of this year, "because of the tariffs."
For reference, the annual inflation rate for 2024, as measured by the Consumer Price Index, was 2.9%.
She also said the "most recent and optimistic outlook" that she's seen suggested the average household will incur a $1,000 hit to income as a direct result of tariffs, as well as their broader impact.
However, Yellen acknowledged that "there remains a huge degree of uncertainty" around the Trump administration's trade policies, which, she said, will keep Powell & Co. "firmly in latency territory."
- Karee Venema
Let's talk about the Fed and sentiment surveys
The Fed will certainly take notice of the surge in consumer sentiment reflected in preliminary University of Michigan survey data for June. Improvement at the headline level for the first time in six months is good news.
Details are good too.
"All five index components rose," writes survey director Joanne Hsu, "with a particularly steep increase for short and long-run expected business conditions, consistent with a perceived easing of pressures from tariffs."
Meanwhile, Hsu continues, "Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed."
Indeed, one-year-ahead inflation expectations plunged from 6.6% to 5.1%, and the five-year figure ticked down from 4.2% to 4.1%, both readings the lowest in three months.
OK, here's the thing… The Fed already had a read on improved sentiment – including all-important inflation expectations – based on a dataset it probably favors.
The Michigan survey is robust and trustworthy, no question. However, the New York Fed Survey of Consumer Expectations includes design features that set its data apart on a head-to-head basis.
The New York Fed simply asks more people more specific inflation-related questions, and it asks basically the same group of people questions designed to reflect current conditions over the course of 12 months.
Both surveys use "rotating" panels. But Michigan polls a new set of respondents every month, which its designers say smooths potential biases and captures a broader range of opinion.
The NY Fed tracks a fixed group of respondents over the course of a year, with a consistent fraction of respondents entering and exiting the panel each month.
So monetary policymakers are able to track changes over time at a more granular level.
Michigan is useful. We also cross-check that kind of soft data with actual behavior in the form of hard retail sales data, for example, for a broader look at consumer health.
The New York Fed, by comparison, is a harder form of soft data, specifically with regard to inflation expectations.
- David Dittman
Retail sales arrive ahead of the Fed meeting
Retail sales are one of the more noteworthy events on next week's economic calendar. The data gives a key look at inflation and consumers' ability and willingness to spend money.
In April, retail sales rose a stronger-than-expected 0.1%, while March's increase was upwardly revised to 1.7%.
"The lack of a pullback in April sales indicates that consumers are still buying heavily in anticipation of price increases driven by new tariffs later," writes David Payne, staff economist at The Kiplinger Letter, in Kiplinger's retail outlook.
For May, BofA Securities economists Aditya Bhave and Shruti Mishra expect retail sales growth to be flat month to month as positive seasonal factors will offset weak spending on home improvement, groceries, gas and furniture.
Retail sales will be released on Tuesday, June 17, at 8:30 am Eastern Standard Time.
- Karee Venema
What will the dot plot reveal?
It's all but certain that the Fed will keep interest rates unchanged this time around, but there is still plenty that could move markets.
Indeed, this meeting will include the release of the central bank's Summary of Economic Projections (SEP), or "dot plot," which summarizes what each member expects monetary policy to be going forward.
In March, the Fed's dot plot indicated expectations that the federal funds rate would be lowered to 3.9% by the end of 2025, suggesting just two quarter-point rate cuts by year's end.
The March SEP also implied expectations for slower growth, higher unemployment and a slight increase in inflation.
A team of Deutsche Bank economists led by Matthew Luzzetti expects the dot plot will show expectations for just one rate cut this year and for a downgrade to GDP growth for 2025 (to 1.3% from 1.7%).
They believe the unemployment rate projection will remain unchanged at 4.4%, while the year-end inflation forecast, which "will be the most difficult to assess given the uncertainties around tariffs," will rise to 3.0% from 2.8%.
- Karee Venema
Why it's a safe bet that Powell will wear a purple tie on Wednesday
While the odds of a June rate cut are low, the odds are high that Federal Reserve Chair Jerome Powell will wear a purple tie during Wednesday's press conference.
That's because Powell always wears a purple tie. And there's a reason for it.
During an early April Q&A session with journalists at the Society for Advancing Business Editing and Writing (SABEW) conference, Powell was asked about the significance of his purple ties.
"At the beginning, the only significance was that I like purple ties," Powell replied. At his next press conference, he said he went to reach for a red or blue tie and thought, "Maybe not … so I wind up wearing purple."
He said now it's become "a thing," and it supports the fact that the Fed "is strictly non-political" and "bipartisan," and purple is a good color for that.
"Plus, I like purple ties," Powell concluded.
- Karee Venema
What time will the Fed statement be released?
The Federal Open Market Committee will release its updated policy statement at 2 pm Eastern Standard Time on Wednesday, June 18.
"Uncertainty about the economic outlook has increased further," the FOMC noted in its May policy statement, adding that the committee "is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen."
This time around, Deutsche Bank economists expect some minor adjustments to the statement, including the removal of a reference to net exports weighing on first-quarter gross domestic product, which caused a contraction in U.S. economic activity.
The economists note that most data points released since Q1 GDP point to solid economic activity and labor market conditions.
- Karee Venema
