Fed "Growth is robust, Inflation remains a challenge"… Interest rate adjustment is in 'Cautious mode'

The United States Federal Reserve (Fed) simultaneously showed optimism and caution about the U.S. economy through the June Federal Open Market Committee (FOMC) statement. The Fed evaluated that 'The U.S. economy is still maintaining solid growth, unemployment rates are low, and the job market is stable.'

However, the Fed reaffirmed that inflation remains above its target of 2%, indicating that it will take time to achieve the price stability target. Consequently, regarding future base rate adjustments, it stated that it will 'carefully assess economic indicators and forecasts comprehensively.'

In this meeting, the Fed maintained its stance that Quantitative Tightening (QT) would continue as planned, and adjusted the projected U.S. GDP growth rate for 2025 to 1.4%, lower than its previous forecast. On the other hand, it raised the inflation forecast to 3%, suggesting that price pressures may last longer than expected.

In the market, this announcement is interpreted as a signal that will temporarily defer expectations for a rate cut, while investors are focusing on upcoming employment and consumption data that will be announced.