Fed sticks with forecast of two interest-rate cuts this year despite new inflation worries

2 weeks ago 5

Fed sticks with forecast of two interest-rate cuts this year despite new inflation worries

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Yet Powell says not to take Fed forecasts too seriously because of tariff uncertainty

Last Updated: June 18, 2025 at 4:13 p.m. ET
First Published: June 18, 2025 at 2:06 p.m. ET

The Federal Reserve on Wednesday stuck to its forecast of two interest-rate cuts in 2025 despite seeing a burst of inflation coming in the next few months as a result of higher tariffs.

In an updated forecast, Fed officials now expect inflation as measured by the core PCE index to jump to 3.1% by the end of the year, up from a rate of 2.5% in April.

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Greg Robb

Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.

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