Fed Keeps 2 Cuts in 2025, but Dumps 1 Cut in 2026 on Inflation

Our Cookie Policy has been updated! The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you acknowledge our privacy policy and consent to the use of cookies.

Economic Data & Analysis

Global Economy Briefs

Timely insights from the Economy, Strategy & Finance Center

Fed Keeps 2 Cuts in 2025, but Dumps 1 Cut in 2026 on Inflation

June 18, 2025

The updated Fed dot plot sent a slightly dovish signal with the median participant still penciling in two 25-basis-point cuts for 2025, unchanged from the March projections. However, higher for longer inflation projections resulted in one fewer cuts in 2026.

Trusted Insights for What’s Ahead^®

The updated Summary of Economic Projections (SEP) showed the Fed expects tariffs to push inflation significantly higher in H2 relative to the current pace. Simultaneously, the Fed further downgraded their forecast for growth and raised their projection for the unemployment rate (see Figures 1-3 below).
During his press conference, Chair Powell indicated the Fed still has a cutting bias. The Fed is just waiting for some clarity on how tariffs will affect the outlook. We expect the data over the next three months will provide enough evidence for the Fed to be able to have a more decisive view by the time of the September meeting.
In our view, the negative impact on growth will likely overwhelm that of higher inflation, resulting in policy rate cuts in H2 2025. We still expect two rate cuts this year – in September and December.
The ultimate Fed action will depe

Download Brief

Author

Yelena Shulyatyeva

Senior US Economist

Read BioYelena Shulyatyeva

Please sign in to access. To learn more about membership, click here.

Sign In
Create An Account

By Clicking 'Create Account',
You Agree To Our Terms Of Use

Create Account

Members of The Conference Board get exclusive access to Trusted Insights for What’s Ahead^® through publications, Conferences and events, webcasts, podcasts, data & analysis, and Member Communities.

Economic Indicator Calendar

All release times displayed are Eastern Time

Press Releases / In the News

PRESS RELEASE

LEI for Australia Increased in May

July 15, 2025

PRESS RELEASE

LEI for Brazil Decreased in June

July 15, 2025

PRESS RELEASE

The LEI for Germany Surged in May

July 11, 2025

PRESS RELEASE

LEI for Spain Rose in May

July 10, 2025

PRESS RELEASE

LEI for South Korea Increased in May

July 10, 2025

PRESS RELEASE

LEI for Japan Fell Further in May

July 09, 2025

Data central

Subscribe to Access Data Central & Chart Reports

Your centralized, one-stop portal for accessing and exporting The Conference Board global suite of monthly and quarterly economic data. Get up to speed on critical trends—anytime, anywhere—with customizable real-time datasets.