Fed Split on 2025 Rate Cuts Amid Global Uncertainty

Federal Reserve officials are divided on the outlook for 2025 rate cuts, with eight of nineteen policymakers projecting two cuts, seven expecting none, and two forecasting just one. The Fed unanimously kept rates steady at 4.25%-4.50% in June, citing persistent inflation, rising unemployment, and increased economic uncertainty due to new tariffs and ongoing global conflicts, particularly in the Middle East. Market expectations have shifted, with traders now seeing a significant risk of only one or no rate cuts in 2025. Analysts remain split, with some, like Wells Fargo's Paul Christopher, pointing to indicators supporting a possible cut, while others, such as former Atlanta Fed President Dennis Lockhart, do not rule out no cuts at all. Policymakers also forecast that inflation will remain elevated and economic growth will weaken. These divisions underscore the heightened uncertainty facing both the central bank and the markets.