29-05-2025
Fed 98% Likely To Leave Key Rate Intact After Latest Meeting Minutes
Tierney L. Cross/Bloomberg
Federal Reserve officials are 98% likely to leave the benchmark federal funds rate unchanged at their next meeting in June after the central bank's latest monetary policy meeting minutes depicted economic conditions as highly uncertain.
There is a 97.8% chance that Fed policymakers will decide to keep the target range for the fed funds rate, which has significant implications for broader borrowing costs, intact at their next policy meeting on June 18, according to data provided by the CME FedWatch Tool following the release of the latest policy minutes.
The graphic below provides a screenshot of the aforementioned tool taken close to 8 p.m. EST:
This tool shows the likelihood that Fed officials will keep the benchmark rate unchanged at their ... More next policy meeting.
Such policy decisions can have implications for a wide range of risk assets like cryptocurrencies and stocks. Many of these assets do not make regular payments, and as long as the benchmark rate stays high, it will place upward pressure on the yields paid by many fixed-income financial instruments.
This set of circumstances could potentially reduce demand for the aforementioned risk assets.
The minutes of the central bank's latest policy meeting, which involved members of both the Board of Governors of the Federal Reserve System and the Federal Open Market Committee, emphasized that the financial institution's officials might encounter challenging circumstances that could complicate their ability to make policy decisions.
'Participants noted that the Committee might face difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken,' the minutes stated. 'Participants observed, however, that the ultimate extent of changes to government policy and their effects on the economy was highly uncertain.'
At the same time, the policymakers did speak to strength in the job market, stating that 'Participants further noted that the unemployment rate had stabilized at a low level and that labor market conditions had remained solid in recent months.'
'In this context, and amid a further increase in uncertainty about the economic outlook and a rise in the risks of both higher unemployment and higher inflation, all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent,' the minutes continued.
