Fed: less uncertainty on outlook, towards a half-point rate cut in 2025

There is less uncertainty about the economic outlook than in May, although risks related to the impact of tariffs and inflation remain. Most bankers, however, expect an interest rate cut of half a percentage point by the end of the year. This is what emerges from the minutes of the latest meeting of the Federal Open Market Committee (FOMC), the Federal Reserve body responsible for US monetary policy. On that occasion, last 18 June, the Fed decided by a unanimous vote - 12-0 - to keep interest rates at 4.25 per cent to 4.50 per cent, as expected by analysts. According to the Fed, 'uncertainty about the economic outlook has diminished, but remains high'.

While there is agreement that more clarity is needed before proceeding on rates, the minutes still reveal divisions within the Fed on how to proceed. A couple of central bank members said they were open to considering an interest rate cut in July should the data evolve according to their expectations. Other participants said that the most appropriate path would instead involve no rate cuts in 2025. The Fed is under attack from President Donald Trump, who is clamouring for a cut in interest rates. "They are at least three points too high," he explained, pointing out that each point costs $360 billion a year.

"All except 'too late'". Donald Trump again attacked Federal Reserve Chairman Jerome Powell, whom he dubbed 'too late', in a post on Truth Social. Trump has repeatedly blamed Powell for the failure to cut interest rates. 'Rates are at least three points too high,' he added. Currently, rates are at 4.25-4.50 per cent.