According to the FOMC statement, there has been slight progress in achieving the Committee’s 2% inflation goal in recent months. Previously, the Committee had reported no progress in reducing inflation.
Updated economic projections indicate that the Fed’s median expectation for the federal funds rate at the end of 2024 is 5.1%, up from 4.6%. This suggests the central bank now anticipates only one 25 basis point rate cut this year, compared to the previously expected 75 basis points.
The Fed’s expectations for the end of 2025 stand at 4.1%, indicating a potential rate cut of 100 basis points next year.
At the post-meeting press conference, Fed Chair Jerome Powell stated that inflation remains too high, but the central bank is focused on bringing it back to the 2% target.
Earlier, the U.S. Consumer Price Index (CPI) report for May showed an unexpected slowdown in inflation last month, leading to a sharp rally in cryptocurrency, stock, and bond markets.
However, the hawkish shift in the Fed’s economic forecasts dampened these rallies. At the time of writing, Bitcoin is trading at $66,900.