Fed Holds Steady: Rates Unchanged Amid Stagflation Concerns

TL;DR;

The Federal Reserve decided to leave interest rates unchanged for the fourth consecutive meeting, while acknowledging diminished but still elevated uncertainty. They lowered the 2025 GDP estimate to 1.4% and increased the inflation estimate to 3%. The median Fed forecast indicates 50 basis points of rate cuts in 2025, with rates projected at 3.6% in 2026 and 3.4% in 2027. Interest rate futures suggest rate cuts may begin in September. The Fed's pause occurs amidst calls for 100 bps rate cuts, and the central bank seems to be preparing for a period of stagflation.