The Federal Reserve is widely anticipated to maintain its current interest rate policy, holding them within the target range of 4.25% to 4.5% when the decision is announced at 2 p.m. ET on Wednesday. This meeting marks a crucial moment for investors and economists as the committee will detail the latest outlook for U.S. gross domestic product and provide further guidance on the anticipated path of interest rates. A primary focus will be on whether the Federal Open Market Committee will uphold its previously communicated forecast of two rate cuts throughout the year. Inflation expectations are also expected to play a significant role, particularly given the rising tensions in the Middle East, which are contributing to increased oil prices. Traders will closely scrutinize Fed Chair Jerome Powell’s press conference at 2:30 p.m., seeking valuable insights into the future trajectory of monetary policy and any potential responses to the White House’s advocacy for more accommodative measures. President Donald Trump's recent criticism of Chair Jerome Powell, labeling him "stupid," adds another layer of complexity. Speaking outside the White House Wednesday morning, Trump stated he did not anticipate central bank policymakers would cut rates at the conclusion of the June meeting. "So we have a stupid person," Trump said of Powell. "Frankly you probably won't cut today." He further argued that Europe had experienced ten rate cuts while the U.S. had none, suggesting Powell’s approach was politically motivated. "He's a political guy, I don't know. He's a political guy who’s not a smart person, but he’s costing the country a fortune," Trump added.

Fed funds futures trading overwhelmingly indicates that the Federal Reserve is likely to maintain the status quo, reinforcing the expected target range of 4.25% to 4.5%. The Federal Reserve's outlook is poised to be the most significant market-moving development on Wednesday. Policy makers are widely expected to hold interest rates steady, but traders are eager to hear their latest assessment of the path forward. The Federal Open Market Committee will release its Summary of Economic Projections, which includes forecasts for inflation, economic growth, and the unemployment rate. The Fed’s "dot plot," showcasing FOMC members’ projections for interest rates, will also be closely analyzed. This forecast arrives at a critical juncture for the U.S. economy, which is navigating uncertainty surrounding President Trump’s tariff policies, mixed economic data, and the escalating conflict between Israel and Iran, which is driving up energy prices.

As of June 13th, the Federal Reserve is largely expected to remain patient, holding rates steady at the target range. Despite three rate cuts in late 2024, borrowing costs remain elevated for consumers. During the week of June 13, rates on 30-year fixed mortgages stand at 6.89%, according to MND, a significant increase from 4.29% during the week of March 11, 2022 – prior to the Fed’s rate-hiking campaign. Home equity loan rates are also high, at 8.4% as of June 13, compared to 5.96% in March 2022, per Bankrate. Credit card borrowers are also facing higher interest rates, hovering at 20.12%, per Bankrate, up from 16.34% in March 2022. While higher rates have presented challenges for borrowers, they have been beneficial for savers. Yields on money market funds are at 0.44% as of June 13, compared to 0.08% in March 2022, according to Haver. Five-year certificates of deposit have seen their annual percentage yields rise to 1.71% as of June 13, up from 0.50% in March 2022, Haver found.