June Fed meeting recap: Fed leaves rates alone, continues to see two cuts in 2025-July 2024-www.financetom.com

June Fed meeting recap: Fed leaves rates alone, continues to see two cuts in 2025

News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities

June Fed meeting recap: Fed leaves rates alone, continues to see two cuts in 2025

Jun 18, 2025 5:35 PM

Bankrate's experts are reacting live to the Federal Reserve's June interest rate decision

Bankrate has been the top source for information on interest rates and the Federal Reserve since its inception in 1976. Follow along to see what our expert staff of reporters, writers, editors and financial analysts are watching.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Reporter and analyst Sarah Foster covers the Federal Reserve, the U.S. economy and economic policy for Bankrate, where she helps readers understand how the world's most powerful policymakers in Washington, D.C., impact their personal finances. She's covered the Federal Reserve and U.S. economy since 2018, when she joined the economics news team at Bloomberg News.

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 5:00 PM EDT

Edit Update

This concludes our live blog! Thanks for joining

Thanks for following along with our live coverage of the Federal Reserve's June meeting. If you'd like to keep following the latest economic developments and what they could mean for interest rates, visit us at Bankrate.com.

The Federal Reserve and your money

Get insights from Bankrate experts on the Federal Reserve's latest interest rate announcement and the steps you should take next.

Learn more

Stephen Kates, CFP

Bankrate Financial Analyst, Wealth

Expertise

Comprehensive financial planning

Wealth management

Stephen Kates is a CFP(R) professional and personal finance expert specializing in financial planning and education. He is a Financial Analyst for Bankrate, providing strategic insights on economic trends, wealth management, retirement planning, and personal finance.

Connect with Stephen Kates, CFP on LinkedIn

Get in contact with Stephen Kates, CFP via Email

Stephen Kates, CFP

6/18/2025, 4:58 PM EDT

Edit Update

The Fed remains focused on inflation

The Fed is in no rush to make any changes to interest rates and is comfortable with the current economic conditions, even while the administration and many economists are not. The focus is still squarely on inflation for the next few months.

I expect there will be one to two rate cuts this year, and if inflation remains relatively cool in July and August, the first rate cut in 2025 should come in September.

As Chair Powell said multiple times, the committee has little conviction for the rate path, given uncertainty. Barring any unforeseen shock, it is unlikely we'll see a deterioration in the labor market great enough to tilt the scales toward easing more.

Mark Hamrick

Washington Bureau Chief, Senior Economic Analyst

Expertise

Personal Finance

Economy

Mark Hamrick is Washington Bureau Chief for Bankrate. He is a national award-winning business and financial news journalist.

Connect with Mark Hamrick on Twitter

Connect with Mark Hamrick on LinkedIn

Get in contact with Mark Hamrick via Email

Mark Hamrick

6/18/2025, 4:20 PM EDT

Edit Update

Powell expects tariffs to keep driving up prices

Chair Powell suggested that taxes on imports, known as tariffs, will keep driving up prices in the coming months. He noted that all of the forecasters he's been monitoring believe this to be the case. Interestingly, this is consistent with a new Bankrate survey finding that nearly two-thirds of Americans believe tariffs will be negative for their finances. That's not what Powell said, but he expressed confidence that consumers will feel some degree of bite from rising prices in the not-too-distant future.

Our advice at Bankrate is for individuals and households to prioritize emergency savings and to pay down debt. This will be especially helpful if consumer prices surge, making life more expensive for just about everyone.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 4:15 PM EDT

Edit Update

Here are my 3 recommended tips for preparing for a recession

As an economy reporter, I have a few tricks of my own

As an economy reporter, I like to joke that I'm paid to obsess over recessions. I'm always trying to figure out when there could be another downturn -- even when they don't look like a foreseeable risk.

It's true that not everyone loses their job during a recession, but in my nearly eight years of reporting on the economy, I've learned that recessions have consequences for the people lucky enough to remain employed, too. With fewer job prospects, they feel less inclined to ask for higher pay and negotiate. Their wage growth stagnates, and they might stay put at jobs they're unhappy at for longer. They also might see their retirement accounts struggle and delay milestones or big-ticket purchases.

When my reporting starts to feel a little too real, I often take it as a sign that I need to go back through my finances, my network, my resume and any other important documents to make sure I'm prepared to act quickly if a recession were to impact my position. It's like making sure I know where the exit signs are or where the emergency fire hydrant is.

Most of the time, these are my three favorite steps for forming my "break-glass-in-case-of-emergency" plan:

Take stock of the financial buffers I already have: I make a note of every savings account I have and their current balance. This doesn't just include the funds in my high-yield savings accounts (I have two) but also my Roth IRA -- which allows me to withdraw my contributions at any time without having to pay any penalties or taxes.

Know my "survival" number: Most experts like to recommend saving at least six months' worth of your expenses, but it's safe to say that many of us are paying for things we likely wouldn't continue to fund if we lost our jobs or our income dropped. Sadly, for me, that means saying goodbye to my HBO Max subscription and downgrading my gym membership. I like to make two calculations: my current monthly expenses and then my "survival" number to determine whether I still have enough in a liquid, accessible account to cover my essential monthly bills.

Get all of my documents in order: Most of us probably don't like the idea of having to scramble to get our resume or our financial documents in order when we've just learned that we've been let go. That's why I like to remind myself where my important documents are - such as my current pay stub and wage details, the start date of my employment, my employer's federal identification number and more - any time I feel like the economy feels a little uncertain. You'll need all of that information if you were to apply for unemployment benefits.

Powell: Workers still have it pretty good

The FOMC's projections suggest some softening in the job market and economic growth in the months ahead, and officials also see price increases being passed along to consumers from tariffs.

I asked Chairman Powell if he thinks workers still have a degree of bargaining power to ask for higher pay -- a crucial question right now as officials look to see whether tariffs may lead to a more persistent inflation problem.

"It's a pretty good labor market," Powell said. Wages are still moving up "at a healthy clip," he said. But he also noted that workers are facing longer search times in the midst of slower hiring.

Bottom line: Powell suggests that workers should generally expect decent wage growth as long as unemployment stays stable.

Greg McBride, CFA

Chief financial analyst, Personal Finance

Expertise

Personal finance

Investing

26 Years of experience

Greg McBride, CFA, is the Chief Financial Analyst for Bankrate.com, leading a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.

Connect with Greg McBride, CFA on Twitter

Connect with Greg McBride, CFA on LinkedIn

Get in contact with Greg McBride, CFA via Email

Greg McBride, CFA

6/18/2025, 4:03 PM EDT

Edit Update

The Fed's decision offers little hope of a significant drop in interest rates any time soon

Chair Jerome Powell characterizes the economy as in a 'solid' position but the FOMC expects a 'meaningful amount of inflation' to arrive in the months ahead. Waiting affords more time to digest incoming data and, they feel, will lead to better decisions on their part.

Jeff Ostrowski

Writer and Housing Market Analyst

Expertise

Mortgages

Mortgage refinancing

Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he spent more than 20 years writing about real estate, business, the economy and politics.

Connect with Jeff Ostrowski on Twitter

Connect with Jeff Ostrowski on LinkedIn

Get in contact with Jeff Ostrowski via Email

Jeff Ostrowski

6/18/2025, 4:00 PM EDT

Edit Update

Why recession fears shouldn't derail your homebuying plans

Back in April, J.P. Morgan Research raised its odds of a recession this year to 60 percent, up from 40 percent. That weighs on the Federal Reserve's decisions about interest rates -- but should a potential downturn affect your homebuying decision?

Probably not, housing experts say. For a buyer, the main fear boils down to: Am I going to lose my job in a recession? The answer is not likely. For perspective, consider that the national unemployment rate briefly surged past 10 percent during the Great Recession and the pandemic. During most U.S. recessions, however, the jobless rate remains in the single digits. In other words, more than 90 percent of Americans keep their jobs.

Ultimately, a generalized fear of a recession shouldn't change your homebuying plans, but if you have a specific concern about job security, then it's smart to tread cautiously.

Ted Rossman

Bankrate Senior Industry Analyst, Credit Cards

Expertise

Credit cards

Credit scores

Ted Rossman is a senior industry analyst at Bankrate. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores.

Connect with Ted Rossman on Twitter

Connect with Ted Rossman on LinkedIn

Get in contact with Ted Rossman via Email

Ted Rossman

6/18/2025, 3:58 PM EDT

Edit Update

The 'higher for longer' school of thought is gaining steam

A growing minority of FOMC members are forecasting zero rate cuts this year -- seven of 19 are making that prediction, up from four of 19 three months ago. And even if we get a cut or two, that won't make a big difference in the grand scheme of things.

This is good news for savers but bad for borrowers. The average credit card rate, for example, is a near-record 20.12 percent and unlikely to fall substantially anytime soon. Mortgage and auto loan rates remain quite elevated as well.

Brittany Howard

Writer, Loans

Expertise

Personal finance

Consumer loans

4 Years of personal finance experience

Brittany Howard joined the Bankrate team in 2024. Before specializing in loans, she wrote on a range of personal finance topics, including checking and savings accounts, credit cards, and credit scores.

Connect with Brittany Howard on LinkedIn

Brittany Howard

6/18/2025, 3:45 PM EDT

Edit Update

Auto loan lenders are cautious as Fed rate remains unchanged

Record-high car prices coupled with high interest rates have made affordability an issue for many consumers. Prices are expected to rise further due to tariffs and shrinking vehicle inventory, and a shortage of used vehicles is also keeping prices unusually high. This means that lenders will see higher loan amounts and older used vehicles, resulting in riskier loans.

Because car buyers need to borrow more and turn to longer loan terms, lenders are increasingly courting borrowers who pose less risk. The average credit score to qualify for an auto loan has been increasing, but subprime approvals rose slightly in May, according to recently published data in the Dealertrack Credit Availability Index. While interest rates may not fluctuate much through 2025, it may still become more difficult to afford a car in the coming months. Take the Fed rate into some consideration when shopping, but remember that lenders rely on much more to guide approvals and interest rates.

Learn more at:

Access to credit is tightening -- here's what it means for your next auto loan

James Royal, Ph.D.

Principal writer, Investing and wealth management

Expertise

Investing

Wealth management

Bankrate principal writer and editor James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times ( NYT ) and more.

Connect with James Royal, Ph.D. on Twitter

Connect with James Royal, Ph.D. on LinkedIn

Get in contact with James Royal, Ph.D. via Email

James Royal, Ph.D.

6/18/2025, 3:30 PM EDT

Edit Update

Long-term bond yields have been rising: Here's why you should pay attention

Investors are demanding higher returns for the growing risks of long-term U.S. inflation

Bond investors have been pushing up 10-year Treasury rates since the Fed first began lowering short-term rates in Sept. 2024, indicating they expect higher inflation in the future. Since April, the 10-year rate continues to set "higher lows" each time the yield falls.

The key driver of long-term rates now is President Trump's "One Big Beautiful Bill" Act, which would increase long-term U.S. budget deficits and inflation, as it includes a series of tax cuts without offsetting cuts to government spending.

As bond investors expect greater inflation in the future, they're demanding higher rates on long-term Treasurys, notably the 10-year Treasury note. The 10-year Treasury is key to the housing market and homebuyers, since mortgage rates are priced based on the 10-year rate.

So homebuyers looking for much-reduced mortgage rates may need to keep waiting, perhaps until a recession, while homesellers shouldn't expect lower rates to boost home prices soon.

Learn more:

6 ways the Fed affects your money.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 3:08 PM EDT

Edit Update

Powell has tried to downplay the Fed's interest rate projections

We're just about 20 minutes into the Fed's post-meeting press conference, and we've heard Powell hint multiple times that officials think their latest interest rate projections could have a pretty big margin of error.

"No one holds these rate paths with a lot of conviction," Powell said.

The message for consumers: Don't get too comfortable with the Fed's new projections for two rate cuts in 2025. Policymakers are facing an uncertain economic environment, and their projections will shift as the data paints a clearer picture.

Case in point: No official in June 2024 projected that the U.S. central bank would end up cutting borrowing costs a full percentage point by the end of the year. The median estimate penciled in just one quarter-point rate cut.

Stephen Kates, CFP

Bankrate Financial Analyst, Wealth

Expertise

Comprehensive financial planning

Wealth management

Connect with Stephen Kates, CFP on LinkedIn

Get in contact with Stephen Kates, CFP via Email

Stephen Kates, CFP

6/18/2025, 3:03 PM EDT

Edit Update

How many months of cool inflation is enough?

Powell fielded two successive questions about "how many months" of cooling inflation will it take before the Fed decides that the economy is in the right place for more interest rate cuts. The Fed chair alluded to the lack of conviction for the rate paths and scenario analysis given the still high level of uncertainty the economy and the committee face. Powell said that they expect to learn more throughout the summer. This spells doom for any July cuts.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 3:01 PM EDT

Edit Update

That slowdown in the labor market doesn't look to be scaring the Fed just yet

The slowdown in the labor market doesn't appear to be raising any alarm bells at the Fed, Powell said at his post-meeting press conference.

"You can see perhaps a very, very slow, continued cooling, but nothing that's troubling at this time," Powell said. "But we watch it very, very carefully."

Stephen Kates, CFP

Bankrate Financial Analyst, Wealth

Expertise

Comprehensive financial planning

Wealth management

Connect with Stephen Kates, CFP on LinkedIn

Get in contact with Stephen Kates, CFP via Email

Stephen Kates, CFP

6/18/2025, 2:45 PM EDT

Edit Update

The Fed describes the labor market as 'solid' in its post-meeting statement. Is it?

I expect Powell to get a lot of questions about the labor market this time. The Fed describes the labor market as 'solid' in its post-meeting statement. Is it? There are a lot of workers and economists who would question that statement given the slowdown in wage growth, the low rate of hiring, and the multiple weeks of rising jobless claims.

Greg McBride, CFA

Chief financial analyst, Personal Finance

Expertise

Personal finance

Investing

26 Years of experience

Connect with Greg McBride, CFA on Twitter

Connect with Greg McBride, CFA on LinkedIn

Get in contact with Greg McBride, CFA via Email

Greg McBride, CFA

6/18/2025, 2:31 PM EDT

Edit Update

This is a Fed that sees no hurry to cut interest rates

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 2:21 PM EDT

Edit Update

The Fed continues to project two rate cuts in 2025

A growing share, however, see no rate cuts this year

The Fed just released its new interest rate projections. Here's what officials are expecting to do:

Policymakers continue to project a median of two rate cuts this year

Just two officials expect to cut rates three times

Two officials expect one cut, and a growing share of policymakers (seven in June 2025, up from seven in March) now expect rates to stay steady for the entire year

Interest rates, however, are expected to stay at a decade-plus high through 2027

The message for consumers is: This is a cautious Fed. Even if the Fed does cut its key benchmark interest rate, the borrowing costs that you pay to finance big-ticket purchases are expected to stay elevated for as far as the eye can see. But, of course, these projections are only if the U.S. economy evolves the way the Fed expects -- and U.S. central bankers are facing a highly uncertain environment, given that tariffs could either cause the economy to slow or generate more inflation.

Learn more at:

The Federal Reserve's latest dot plot, explained - and what it says about interest rate cuts.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 2:18 PM EDT

Edit Update

The Fed is warning that the economy may weaken

Officials see higher unemployment and inflation, new projections show

The Fed also revealed where it expects inflation, unemployment and economic growth to be in the year ahead.

Here's the median projection from the entire Federal Open Market Committee (FOMC):

Inflation: 3%, up from 2.7% in March (current 2.1%)

Core inflation: 3.1%, up from 2.8% (current 2.5%)

Unemployment: 4.5%, up from 4.4% (current 4.2%)

Economic growth: 1.4%, down from 1.7% (The economy shrank -0.3% in Q1)

What it means: Unemployment is expected to rise a bit higher, the Fed doesn't think we're now out of the woods when it comes to inflation just yet and U.S. economic growth could be the weakest in years. While we can't definitively term this a "recessionary" forecast (the Fed's own estimates of "full employment" are around 3.5-4.5%), it strongly suggests that consumers could face the weakest economy since the pandemic, potentially even more sluggish than the pre-pandemic economy.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 2:09 PM EDT

Edit Update

The Fed's rate decision is in

The FOMC has now gone six months without a rate cut, but officials still think they'll be able to cut this year

The Federal Reserve voted on Wednesday to keep interest rates unchanged for the fourth consecutive meeting.

Here's what to know:

Officials are still playing it safe with inflation given widespread concern that President Donald Trump's tariffs could eventually lead to higher prices: Look at the economic data, and a rate cut might appear warranted on paper. Inflation rose just 2.1 percent in April, the closest it's been to the Fed's target since prices first surged in the aftermath of the pandemic, according to the Department of Commerce. Meanwhile, the nation's unemployment rate is holding at 4.2 percent, near the Fed's estimates of maximum employment. Policymakers, however, aren't sure if price pressures will keep trending in the right direction. After Trump lifted import taxes to the highest level since the Great Depression in April, businesses have been telling Fed officials that they'll have no choice but to pass those higher prices onto consumers.

Borrowing costs, but savings yields, will stay elevated: The announcement means the Fed's key benchmark rate will stay in a target range of 4.25-4.5 percent, the highest since 2007. Borrowers looking for lower interest rates will have to keep waiting as the Fed decided to leave interest rates alone again. Savings yields, however, will likely stay elevated, the main silver lining with higher interest rates. There's no guarantee, however, what mortgage rates will do, with those yields following more closely the 10-year Treasury yield.

Looking for our full breakdown? Read more at: Fed keeps interest rates unchanged as it weighs inflation risks from tariffs.

Linda Bell

Writer & Home Lending Expert, Certified HELOC Specialist

Expertise

Home affordability

First-time homebuying

26 Years of experience

Linda Bell is a senior writer on Bankrate's Home Lending team, producing content around HELOCs, financing home renovations, home equity loans and more.

Connect with Linda Bell on Twitter

Connect with Linda Bell on LinkedIn

Get in contact with Linda Bell via Email

Linda Bell

6/18/2025, 1:30 PM EDT

Edit Update

Is 'rate wait' worth it for homeowners hoping to tap equity?

With recession worries in the air, now might be a tricky time to lean on your home's equity. The Federal Reserve is expected to hold pat, which means the rates tied to HELOCs and home equity loans could stay in the 8 percent range we've seen as of late. While that's less expensive than credit cards or personal loans, it's still far from "cheap" borrowing.

That's a tough break if you were planning to tap your home's value for renovations, debt consolidation or a bit of financial breathing room. In this "rate wait" scenario, is it better to keep waiting for lower rates, or go ahead and borrow against your home in uncertain times? I recently explored both cases in my story on tapping your home equity in a recession.

James Royal, Ph.D.

Principal writer, Investing and wealth management

Expertise

Investing

Wealth management

Bankrate principal writer and editor James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times ( NYT ) and more.

Connect with James Royal, Ph.D. on Twitter

Connect with James Royal, Ph.D. on LinkedIn

Get in contact with James Royal, Ph.D. via Email

James Royal, Ph.D.

6/18/2025, 12:45 PM EDT

Edit Update

After plummeting with tariffs, stocks again sit at all-time highs despite growing risks

Markets have shrugged off rising risks and bid up stocks to a whisker of their all-time highs

The S&P 500 and Nasdaq Composite are sitting just below their 52-week and all-time highs despite raging risks, especially the potential inflationary effects of the Trump tariffs but also the risk of rising oil prices, either of which could choke economic growth.

President Trump's 90-day "delay" of the April 2 tariffs marked the bottom of the market, and since then the market's blue chips, including Microsoft ( MSFT ), Alphabet and Amazon, have soared.

But the S&P 500 now trades around 22 times earnings, a historically elevated level, so that even if some of the major risks aren't ultimately realized, stocks are priced for companies to perform very strongly, raising the risk that they may not meet expectations. High rates help keep the brakes on the economy, meaning it's harder for companies to outperform expectations.

While stock prices may be elevated, experts recommend that investors stick to their long-term investing plan, such as a 401(k), which may involve continuing to buy stocks regularly. However, individual investors trying to invest a lump sum with a well-timed trade should be wary.

Learn more:

Why it's time to be careful with stocks having erased their 2025 losses.

Karen Bennett

Senior consumer banking reporter

Expertise

Banking

Personal finance

Karen Bennett is a senior consumer banking reporter at Bankrate. She uses her finance writing background to help readers learn more about savings and checking accounts, CDs, and other financial matters.

Connect with Karen Bennett on Twitter

Connect with Karen Bennett on LinkedIn

Karen Bennett

6/18/2025, 12:00 PM EDT

Edit Update

Savers are winning big from the Fed's rate pause

High APYs are a silver lining during Fed's holding pattern

The Federal Reserve continues to hold its benchmark rate at its highest range since 2007 -- and while this can cause headaches for borrowers, savers are enjoying a moment in the sun. The Fed's 11 rate hikes after the coronavirus pandemic lifted yields on savings accounts and CDs to their highest level in over a decade. While yields have retreated somewhat from those highs as the Fed cut rates, competitive accounts are still earning annual percentage yields (APYs) that are many times greater than accounts earning the national average.

If you're in search of high-yield savings accounts with the best rates, look to online-only banks, which may offer highly competitive yields to draw customers away from long-established big banks. Credit unions can also be a good source of attractive rates because they return profits to their members, often in the form of higher dividends.

Ted Rossman

Bankrate Senior Industry Analyst, Credit Cards

Expertise

Credit cards

Credit scores

Ted Rossman is a senior industry analyst at Bankrate. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores.

Connect with Ted Rossman on Twitter

Connect with Ted Rossman on LinkedIn

Get in contact with Ted Rossman via Email

Ted Rossman

6/18/2025, 11:18 AM EDT

Edit Update

Where do consumer borrowing costs stand now?

"Higher for longer" is the key theme

The Fed hasn't changed its policy rate since last December, and as a result, consumer borrowing costs haven't changed much in 2025, either. That means loans are still expensive relative to most of the past few decades (although not quite as expensive as they were in 2024).

For example, the average credit card rate is 20.12 percent, down from a peak of 20.79 percent last summer but still higher than every single weekly average from 1985 (when we started tracking credit card rates) until 2023.

The average 30-year fixed mortgage rate is 6.90 percent, down slightly from 7.04 percent at the start of the year and considerably lower than the 8.01 percent we observed in October 2023. Mortgage rates were exceedingly low in 2020 and 2021 (the average 30-year fixed rate stayed below 4 percent the entire time and even dipped below 3 percent for a stretch). The weekly average from 2010 through 2019 was 4.26 percent, so today's mortgage rates are still inducing quite a bit of sticker shock. We see this trend with home equity lines of credit, too. The average HELOC rate is 8.22 percent, double what it was four years ago.

Auto loan rates fit the pattern as well: down a little bit from the start of the year but much higher than we observed throughout the 2010s and early 2020s. The average 60-month new car loan, for instance, charges 7.24 percent. In 2019, the weekly average was 4.70 percent.

There's no use crying over spilled milk, of course. We got used to abnormally low rates for about 15 years from the Great Recession through the COVID-19 pandemic. And borrowers are adjusting (if you're waiting to buy a house until mortgage rates fall below 4 percent, you could be waiting a loooong time). But it's also accurate to say that Fed policy remains restrictive. Prices and interest rates have stabilized, yet they're still high.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 10:30 AM EDT

Edit Update

Here's how many times the Fed is expected to cut rates this year

Investors currently think the Fed will cut borrowing costs twice in 2025, bringing its key benchmark federal funds rate to a target range of 3.75-4 percent, according to CME Group's ( CME ) FedWatch tool. The first cut is projected to occur at the Fed's September meeting, and the second cut is expected to happen in December, those rate projections show.

But these forecasts are subject to change. They are purely just a reflection of what investors expect based on the latest economic data and the most recent comments from the Fed itself (which were from mid-June, before the U.S. central bank went on its "black period" before the June meeting).

All that's to say, things could move around a bit if Powell's comments during the press conference or the Fed's new projections offer any surprises. But they're an interesting way to gauge how many people are thinking about monetary policy in this current moment -- and the takeaway for you is, the price of borrowing money is expected to remain elevated for some time.

Learn more:

6 key ways the Federal Reserve impacts your money.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 9:51 AM EDT

Edit Update

Why are tariffs not leading to more inflation? Economic weakness could be behind it, some economists say

Americans are concerned about the state of the U.S. economy

You're going to hear Fed Chair Jerome Powell talk a lot today about the importance of determining whether tariffs are leading to a "sustained" increase in prices.

Typically, there are two ways this could happen:

Higher prices from tariffs could spread across the U.S. economy, impacting more than just imports. Think: The gym memberships that import weights, treadmills or other equipment from overseas; the hair salons that rely on shampoos, conditioners and other hair products from foreign suppliers; and the restaurants that need to raise prices because their produce or ingredients are getting more expensive.

Worried consumers could seek higher-paying jobs or ask their employer for a raise -- forcing companies to pass along higher labor costs the same way they're having to pass along higher input costs from tariffs.

Both occurred during the pandemic. But there's been a few policymakers on the Fed who aren't so sure prices will increase the same way this time.

The most prominent voice is Fed Governor Christopher Waller, who's argued that workers don't have as much bargaining power as they did back in 2022. There's also Richmond Fed President Tom Barkin, who's said that companies are already telling him they don't have much room to pass along higher prices because consumers are already pulling back.

Indeed, retail sales dropped the most in four months, driven by tariff-related anxieties. More than half of Americans (56 percent) say they believe that the U.S. economy is headed in the wrong direction, according to Bankrate's new Consumer Sentiment Survey. And about two-thirds (or 65 percent) believe tariffs will worsen their personal finances, with 41 percent believing they will "greatly" damage their money.

Both outcomes could mean that tariffs end up harming economic growth, not creating sustained inflation.

Powell will likely express that the Fed needs more time to gauge which scenario ends up playing out. But I'll be keeping an eye on how many more data releases Powell & Co. may require before they feel less jittery about tariffs leading to more inflation. If it's just one more tame report, it might mean the Fed expects to eventually get back to cutting borrowing costs again.

Learn more:

Survey: 65% of Americans think tariffs would be bad for their personal finances.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 9:00 AM EDT

Edit Update

Who could be the next Fed chair?

Trump says his pick could be coming 'very soon'

Trump has appeared to back down on his threats of firing Fed Chair Jerome Powell, but his opportunity to replace the chief central banker whom he originally appointed is coming. Powell's tenure as chair is up in 2026, and Trump has said that he'd announce Powell's successor "very soon."

Fed chairs are appointed by the president and confirmed by the Senate. Here's who Wall Street analysts and experts I've talked to say could be in the running:

Kevin Warsh: A former Fed official who President George W. Bush tapped to serve on the Fed's board of governors between 2006 and 2011. He's been a vocal critic of the Fed for the past decade, suggesting most recently in May that it would be the Fed's fault if tariffs lead to inflation. "They're saying that inflation will happen because they don't have the credibility or trust to stop it," he said.

Fed Governor Christopher Waller: The former research director of the Federal Reserve Bank of St. Louis who Trump appointed to the Fed's board of governors in 2019. He's served as a governor since December 2020 and has been one of the few officials on the Fed who believes tariffs will not lead to a sustained increase in inflation.

Treasury Secretary Scott Bessent: One of Trump's key partners in carrying out his sweeping trade, taxes and regulation agenda could also be in the front running for the top Fed seat, according to reporting from Bloomberg. White House officials have denied it and Bessent himself said he'd like to stay at the Treasury through Trump's second term. But although he's stopped short of commenting on monetary policy as explicitly as other Trump administration officials (including Vice President J.D. Vance and Secretary of Commerce Howard Lutnick), he noted in an interview on Fox Business in May that markets "think the Fed should be cutting."

St Louis Fed President Jim Bullard: Bullard, who is now the dean of the business school at Purdue University, could also be in the running for the top Fed job, according to Derek Tang, an economist at LH Meyer. Bullard was the former president of the St. Louis Fed between 2008 and 2023. When I asked Bullard back in May whether he'd say "yes" if the president asked him to become Fed chair, he told me he's happy where he's at. Yet, he's expressed a position that Trump would find appealing: that the Fed should be more concerned about tariffs leading to a recession than inflation.

Learn more:

What the former St. Louis Fed president thinks the U.S. central bank is currently getting wrong with tariffs.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 8:00 AM EDT

Edit Update

Trump wants the Fed to cut interest rates. Is he right?

One person is going to be very unhappy if the U.S. central bank doesn't cut borrowing costs today: President Donald Trump. Here's a timeline of Trump's comments on monetary policy over the past few weeks:

June 4, 2025: After a closely watched payrolls report showed that the private sector created a dismal 37,000 jobs in June, Trump posted on Truth Social that "'Too Late' Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!"

June 6, 2025: Two days later, the Department of Labor's monthly jobs report painted a better picture about the labor market, its own measure showing that private employers created almost four times as many jobs in May (140,000). Trump, however, asked for the Fed to "go for a full point, Rocket fuel!" on his social media account. He also later posted that day: "If 'Too Late' at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due. ... There is virtually no inflation (anymore), but if it should come back, RAISE "RATE" TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!"

June 11: After a report from the Bureau of Labor Statistics showed that inflation rose less than expected in May, Trump posted, "GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!"

June 12: Trump referred to the Fed chair as a "numbskull" for not cutting interest rates. He later claimed at a White House press conference that the Fed should cut rates 2 full percentage points. He said he was not going to fire Powell, but he also doesn't "know why it would be so bad."

So, is there any legitimacy? Yes and no. Cracks are beginning to form in the U.S. economy. Hiring is slower than before the pandemic and workers are remaining unemployed for longer.

"Normally, the Fed would say, 'There could be a downturn. We don't have that much space. Maybe we cut first to stop that from happening,'" Derek Tang, an economist and CEO at LHMeyer, a monetary policy research team founded by former Fed Governor Larry Meyer, tells me.

Yet, massive full percentage-point cuts are typically reserved for economic crises, a look back at the Fed's historic interest rate moves shows. The last time the Fed cut borrowing costs by 100 basis points was in March 2020, when financial markets and economic activity was cratering at the onset of the coronavirus pandemic.

While the U.S. economy has certainly slowed, joblessness is still at historic lows and the stock market is near record highs -- meaning the financial system is a far-cry away from a crisis.

"Without the tariff uncertainty, this is the soft landing the Fed has been working toward for the past three years," says Bankrate Chief Financial Analyst Greg McBride, CFA.

That also means the Fed might've been willing to cut interest rates this month if tariffs weren't in the picture, economists say.

"They've met their goals, there's no real reason to have a federal funds rate at 4.25-4.5 percent," says Luke Tilley, chief economist at Wilmington Trust and a former adviser to the Philadelphia Fed. "Unless you think that's neutral or that these tariffs might cause inflation."

All of that encapsulates the tricky position Powell and Co. find themselves in right now: Central bankers say they make decisions independent from politics, but it's White House policies that are keeping the Fed's rate cuts on hold.

"It's going to be very difficult for the chair to navigate this without appearing critical of the White House," Vincent Reinhart, an economist at BNY Investments who spent more than two decades at the Fed, told me back in May. "The outlook for the economy is the outlook for the political economy, and your economic forecast depends on actions by political authorities."

Learn more:

Here's why the Fed is unlikely to cut interest rates like Trump wants.

Sarah Foster

U.S. Economy Reporter and Analyst

Expertise

Economy

Federal Reserve

8 Years of experience

Connect with Sarah Foster on Twitter

Connect with Sarah Foster on LinkedIn

Get in contact with Sarah Foster via Email

Sarah Foster

6/18/2025, 7:00 AM EDT

Edit Update

The Fed will announce its next interest rate decision today. Here's how to tune in.

It's Fed Day! Policymakers are likely going to keep their key borrowing benchmark at a decade-plus high for another month. No one I've talked to over the past few weeks expects that the Fed will cut rates today. Neither do investors.

Even the very policymakers who decide what to do with interest rates have implied in public appearances leading up to today's meeting that they're not ready to make a rate cut. They need more time to watch and study the data -- and they think they have the time to be patient. Although the job market is showing signs of a slowdown, the nation's unemployment rate remains near historic lows. The Fed's utmost priority: Making sure that tariffs don't lead to another inflation spiral.

But our goal today is parsing through the Fed's many statements to help you determine when the next cut might be -- and if it could occur as soon as the Fed's next rate-setting meeting in July.

Here's the schedule of events:

At 2 p.m. ET, the Federal Open Market Committee (FOMC) will announce its next interest rate decision.

Also at 2 p.m., the Fed will also update consumers and inventors on where they see interest rates and economic growth (think: unemployment, gross domestic product, inflation and more) heading through the rest of this year -- and beyond. Here's an explainer on how to read it.

At 2:30 p.m., Fed Chair Jerome Powell will take questions from reporters (including us at Bankrate!) at a press conference in Washington, D.C.

Check back for updates throughout the day, as we break down what you need to know ahead of the Fed's announcement -- and help you understand what it means for you.

Live coverage contributors

Sarah

Foster

Ted

Rossman

Karen

Bennett

James

Royal

Linda

Bell

Greg

McBride

Stephen

Kates, CFP

Brittany

Howard

Jeff

Ostrowski

Mark

Hamrick

Previous page： In fight to curb climate change, a grim report shows world is struggling to get on track Next page： JPMorgan has a new way to gauge its green progress

Comments

Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.

Show More Comments