This is a segment from the Forward Guidance newsletter. To read full editions, subscribe. To no one’s surprise, the Fed held rates steady in the June FOMC meeting. As is the case in this modern age of monetary policy, the actual rate decision was well-telegraphed and wasn’t what moved markets. In terms of what did move markets…the FOMC statement saw minor changes to wording but, generally, there was very little for market participants to glean. More notably, the updated Summary of Economic Projections was substantial compared to the last update in March. Considering how much has changed since March (Liberation Day and an emerging war with Iran, to name a few things), it’s no surprise to see a significant change in the ways FOMC members see the economy evolving. Based on the table below, we can surmise that: The FOMC sees growth slowing more than what committee members expected in March. The FOMC expects the unemployment rate to tick up marginally but they’re still not concerned about the labor market. The committee further ratcheted up their inflation forecast for 2025 from 2.7% to 3%, noting the risk of tariffs being larger than what they expected. Interestingly, the one thing the FOMC did not change is how many rate cuts they expect to enact this year.