Fed Officials Signal Rate Hold Until September 2025 Despite Trump Pressure; Market Expects Cuts in September and December

Federal Reserve officials have indicated that they are likely to maintain the current federal funds rate until at least September 2025. Market expectations align with this outlook, anticipating no rate changes in June and July, followed by a 25 basis point cut in September to a range of 4.00-4.25%, a hold in October, and another 25 basis point cut in December to 3.75-4.00%. Despite external pressures, including from former President Donald Trump, the Fed has dismissed calls to lower interest rates in the near term. This stance reflects the Fed's determination to manage inflation and avoid premature rate cuts, contrasting with previous actions such as rate reductions before the 2024 election when economic growth forecasts were more optimistic.