03:23 PM EDT, 06/18/2025 (MT Newswires) -- (Updates with the Summary of Economic Projections and comments from Oxford Economics.)

The Federal Reserve on Wednesday kept its policy rate unchanged for a fourth straight meeting, while sticking to its federal funds rate outlook for 2025 amid higher inflation expectations.

The Federal Open Market Committee left interest rates in the range of 4.25% to 4.50%, in line with Wall Street's expectations. Policymakers lowered rates by 50 basis points in September and by 25 basis points each in November and December.

President Donald Trump has been repeatedly urging the Fed to cut rates.

"Uncertainty about the economic outlook has diminished but remains elevated," the FOMC said Wednesday following its two-day meeting. "The committee is attentive to the risks to both sides of its dual mandate."

In May, the FOMC said that economic uncertainty had "increased further" and so had the risks of higher inflation and unemployment.

The FOMC's Summary of Economic Projections showed Wednesday that members reiterated their rate outlook for this year, while lowering economic growth expectations and raising inflation forecasts.

Policymakers continue to see the median federal funds rate at 3.9% at the end of this year, indicating potential easing in 2025. They raised their 2026 rate outlook to 3.6% from 3.4% projected in March and to 3.4% from 3.1% for 2027.

The central bank raised its projections for inflation, as measured by personal consumption expenditures, to 3% from 2.7% for 2025, with 2026 and 2027 estimates also revised higher. Policymakers now see 2025 core PCE inflation, which excludes the volatile food and energy components, at 3.1%, up from the previously estimated 2.8% rise. The core inflation outlooks for 2026 and 2027 were also increased.

The document showed 2025 real gross domestic product growth of 1.4%, down from a 1.7% pace projected in March. The 2026 growth outlook was lowered to 1.6% from 1.8%.

The unemployment rate is now seen at 4.5% this year, up from March's 4.4% view, according to the latest SEP. The FOMC raised unemployment expectations for 2026 and 2027.

"The SEP highlights what the Fed will be focused on, as inflation this year will be noticeably further away from its objective than the labor market will be," Oxford Economics Chief US Economist Ryan Sweet said in a remarks e-mailed to MT Newswires. "Risks are shifting toward the next rate cut being larger, rather than sooner than we anticipate."

Official data released earlier this month showed that US consumer inflation unexpectedly decelerated in May, while producer prices rebounded less than expected. The world's largest economy added more jobs than projected last month, while the unemployment rate stayed at 4.2%.

"The unemployment rate remains low, and labor market conditions remain solid," the FOMC said Wednesday. "Inflation remains somewhat elevated."

The US and China recently agreed on a framework for implementing a trade deal that suspended most tariffs on each other's imports for 90 days. The latest development came after the two nations accused each other of violating the pact. In April, Trump declared a 90-day pause on certain tariffs for countries that didn't retaliate to his reciprocal duties.

Israel and Iran have traded missiles since Friday, when Tel Aviv launched airstrikes across Tehran, targeting its military infrastructure and nuclear facilities.

The FOMC's next meeting is scheduled for July 29-30.