The Fed to keep rates unchanged until September

The Fed is staying put on interest rates and won’t be making any cuts until at least September, based on new data from a June 5–10 Reuters survey of 105 economists.

Almost all of them—103 to be exact—said the Federal Open Market Committee (FOMC) will hold rates steady at 4.25% to 4.50% during the June 17–18 meeting, the same range it’s been stuck in since the start of the year. The only reason? Inflation still hasn’t calmed down, and the labor market isn’t showing enough pain to force the Fed’s hand.

The forecast comes at a time when economic stability is still on edge. Trade negotiations between the U.S. and China remain incomplete, and a July 9 deadline for a temporary 90-day tariff pause is fast approaching.

That truce, first introduced in April, hasn’t led to much actual progress, and now economists are keeping their outlooks fragile. The White House, under President Donald Trump, has raised tariffs on steel and aluminum from 25% to 50%, and markets are starting to price in the cost of those decisions.

On top of that, a massive new tax cut bill just passed by the House of Representatives is fueling more uncertainty, as it hasn’t yet passed through the Senate.

Trump demands cuts as economists hold the line

Despite pressure from Trump to lower rates by a full percentage point—he wants to see the fed funds rate drop to 3.25%–3.50%—the Fed is unmoved.

The central bank is watching inflation expectations closely, and they’ve stayed high thanks to growing assumptions that the U.S. will keep erecting trade barriers. UBS Chief U.S. Economist Jonathan Pingle summed up the hesitation clearly: