June 18 (UPI) — The Federal Reserve is expected to leave interest rates unchanged Wednesday, but also should provide important economic data and a forecast that could impact financial markets.
In the announcement coming Wednesday afternoon, the Fed will report on inflation trends and other data in the midst of economic uncertainty.
The uncertainty stems not only from the unpredictable application of tariffs and ongoing trade volatility caused by them, but also from world events likely to have an impact on U.S. financial markets like the Iran-Israel war.
“The Fed’s main message at the June meeting will be that it remains comfortably in wait-and-see mode,” Bank of America economist Aditya Bhave said in a statement.
“Investors should focus on [Fed Chair Jerome] Powell’s take on the softening labor data, the recent benign inflation prints and the risks of persistent tariff-driven inflation.”
Wall Street economists believe the Fed will keep interest rates in the 4.25% to 4.5% range. According to the CMA Group’s FedWatch, the chances the Fed will keep interest rates unchanged is 99.9%.
The Fed has not cut interest rates so far during the Trump administration. An economic forecast will be released Wednesday afternoon based on economic data.
Despite President Donald Trump aggressively pushing Powell to cut interest rates, he has declined, saying there is too much uncertainty in financial markets, largely because of tariffs that have been imposed and threatened.
