FOMC First Take And Wall Street Reactions

As unanimously expected, the Fed held rates in the 4.25%-4.50% range (for the 4th consecutive time, even as the ECB has cut 8 times already). Within the Statement, key highlight was: economic outlook uncertainty ‘diminished but remaining elevated’ (vs May where uncertainty ‘had increased further’).

FOMC statement redline. Notable changes

- the economic outlook has "diminished but remains elevated" from "increased further".

- scraps stagflation warning line that "risks of higher unemployment and higher inflation have risen" pic.twitter.com/mQ1uELrsK5

— zerohedge (@zerohedge) June 18, 2025

However, as Goldman confirms, the bigger focus and early dovish surprise was within the dotplot which remained unchanged for ’25 (i.e. still pencilling in 50bps of cuts) while at the same time reflecting fewer cuts in ’26 (-25bps) and ’27 (-25bps) vs March SEP.