FOMC

Minutes of the
Federal Open Market Committee
June 17–18, 2025

FEDERAL RESERVE SYSTEM

Minutes of the Federal Open Market
Committee
June 17–18, 2025

A joint meeting of the Federal Open Market Committee and the Board of Governors of the Federal
Reserve System was held in the offices of the Board of Governors on Tuesday, June 17, 2025, at
9:00 a.m. and continued on Wednesday, June 18, 2025, at 9:00 a.m. 1

Review of Monetary Policy Strategy, Tools, and Communications

Committee participants continued their discussions related to their review of the Federal Reserve’s
monetary policy framework, with a focus on issues related to assessing the risks and uncertainty that
are relevant for monetary policy and the potential implications of these issues for the FOMC’s policy
strategy and communications. The staff reviewed qualitative and quantitative tools that are commonly
used to measure uncertainty about the economic outlook and the balance of risks, drawing on U.S.
and international experience. The staff then discussed monetary policy strategies that aim to be
robust to a variety of economic environments and ways in which risk-management considerations can
be incorporated into monetary policy analysis and decisionmaking. The staff also considered the role
of scenario analysis as a tool to communicate to the public risks and uncertainty around the economic
outlook and their implications for monetary policy.

Participants noted that risks and uncertainty are important factors affecting their decisionmaking and
emphasized the need for a policy strategy that aims to achieve the Committee’s maximum-
employment and price-stability objectives across a wide range of highly uncertain developments.
Participants acknowledged that risks and uncertainty about the economy are pervasive and pose
challenges to both the design and communication of monetary policy. They remarked that measuring
and assessing risks and uncertainty are difficult and that the Committee has been well served by
relying on a wide range of indicators, as well as information from business and community contacts, to
gauge evolving risks, especially during periods of heightened uncertainty.

Participants remarked that effective communications about risks and uncertainty help the public
understand the Committee’s decisions and enhance the transparency, accountability, and
effectiveness of monetary policy decisions. Participants had a preliminary discussion about a range of

1 The Federal Open Market Committee is referenced as the “FOMC” and the “Committee” in these minutes; the Board of

Governors of the Federal Reserve System is referenced as the “Board” in these minutes.
 2 June 17-18, 2025

issues related to enhancing the Committee’s suite of communication tools, including possible changes
to the Summary of Economic Projections (SEP) and a potential broader use of alternative scenarios.
Participants highlighted, however, the challenges associated with adjustments to these tools and
noted that any revisions to the Committee’s communication policies would need to be considered
carefully and receive broad support across participants.

Participants agreed to continue their discussions of ways to enhance the Committee’s communication
tools and practices once they completed their review of their Statement on Longer-Run Goals and
Monetary Policy Strategy. Participants expected that they would complete that review by late summer.

Developments in Financial Markets and Open Market Operations

The manager turned first to a review of financial market developments. Over the intermeeting period,
policy expectations and Treasury yields rose modestly, credit spreads narrowed, and equity prices
increased. Markets were attentive to the de-escalation of trade tensions; generally weaker-than-
expected economic data releases, with the notable exception of the May employment report; and
prospects for fiscal expansion. These factors, on net, resulted in some paring back of investors’
perception of downside risk to growth and upside risk to inflation. Results from the Open Market
Desk’s Survey of Market Expectations were consistent with this interpretation: The median
respondent’s expectations for real gross domestic product (GDP) growth and personal consumption
expenditures (PCE) inflation for 2025 retraced some of the moves that occurred after the April tariff
announcements, though growth expectations were still materially lower and inflation expectations
remained higher relative to the March survey.

The median respondent’s modal path for the federal funds rate in the June survey shifted higher
through 2026 and implied two 25 basis point rate cuts both this year and next year. Market-based
policy expectations were largely consistent with survey results, with both the futures-based average
federal funds rate path and the options-based modal federal funds rate path shifting higher over the
intermeeting period. Overall, the changes in the intermeeting period brought policy expectations for
the next few quarters back close to where they stood at the time of the March FOMC meeting.
However, futures-based policy expectations beyond the next few quarters had not fully retraced the
decline seen over the previous intermeeting period, suggesting that perceived medium- and longer-
term downside risks to growth remained larger than before the April tariff announcements. Nominal
Treasury yields rose 15 to 20 basis points, on net, over the intermeeting period. The manager
observed that the rise in shorter-maturity yields was consistent with the upward shift in the expected
policy rate path. The rise in longer-maturity yields appeared to reflect, in part, market participants’
increasing fiscal concerns: In response to a Desk survey question about the top factors behind the
 Minutes of the Federal Open Market Committee 3

respondents’ forecast of the 10-year yield over the next two years, the fiscal outlook was the factor
cited by the largest number of respondents.

Market-implied inflation compensation for the year ahead fell about 20 basis points over the
intermeeting period, while longer-term inflation compensation measures were little changed. Liquidity
conditions for nominal Treasury securities had improved as volatility declined following the stress seen
in the previous intermeeting period. The events of April, and the more recent focus in markets around
fiscal sustainability issues, did not appear to have affected demand for Treasury securities at auction;
an index of auction performance derived from a number of metrics indicated that auction performance
had improved modestly over the past several quarters and was currently in line with the longer-run
average.

Regarding foreign exchange developments, the broad trade-weighted dollar index fell further during
the intermeeting period despite increases in U.S. equity prices and short-term Treasury yields. The
manager noted that dollar depreciation continued to be consistent with larger downside revisions to
the U.S. growth outlook relative to other major economies, which induced increased currency hedging
flows by foreign investors in U.S. assets. The manager also remarked that the sensitivity of the foreign
exchange value of the dollar to domestic economic surprises had not fundamentally changed. The
available data continued to suggest stability in foreign holdings of U.S. assets.

The manager turned next to money markets and Desk operations. Unsecured overnight rates
remained stable over the intermeeting period. Rates in the repurchase agreement (repo) market were
softer relative to the previous intermeeting period, including at the May month-end, as reductions in
net Treasury bill issuance amid the ongoing debt limit situation resulted in increased demand for repo.
With the softness in repo making the overnight reverse repurchase agreement (ON RRP) facility more
attractive on a relative basis, usage of the ON RRP facility had been broadly stable, except for the
typical spike at month-end. Since the start of the debt issuance suspension period in January, the
Treasury General Account (TGA) had declined nearly $420 billion, ON RRP balances had increased
about $75 billion, and reserves had increased $150 billion. Key indicators continued to suggest that
reserves, which stood at nearly $3.5 trillion, were well into the abundant range. Once the debt limit
was addressed, however, the TGA was likely to be rebuilt fairly quickly, which would drain liquidity from
the system and result in fast declines in both ON RRP and reserve balances.

The manager also discussed the trajectory of the System Open Market Account (SOMA) portfolio.
Since balance sheet runoff commenced in June 2022, SOMA securities holdings had fallen almost
$2¼ trillion. As a percentage of GDP, the portfolio had declined to close to where it had been at the
start of the pandemic. The corresponding drain in Federal Reserve liabilities had largely come out of
balances at the ON RRP facility, while reserve levels had been relatively little changed over that period.
 4 June 17-18, 2025

Respondents to the June Desk survey, on average, expected runoff to end in February of next year, a
month later compared with the previous survey, with an expected size of the SOMA portfolio of
$6.2 trillion, or about 20 percent of GDP. At that point, the respondents, on average, expected
reserves to be at $2.9 trillion and the ON RRP balance to be low.

The manager noted that, starting on June 26, the Desk will begin adding regular morning standing
repo facility (SRF) operations to the existing afternoon operations. The additional operations are
intended to further enhance the effectiveness of the SRF in its ability to support monetary policy
implementation and smooth market functioning.

By unanimous vote, the Committee ratified the Desk’s domestic transactions over the intermeeting
period. There were no intervention operations in foreign currencies for the System’s account during
the intermeeting period.

Staff Review of the Economic Situation

The information available at the time of the meeting indicated that consumer price inflation remained
somewhat elevated. The unemployment rate continued to be low, and labor market conditions were
solid. Available indicators suggested that real GDP was expanding at a solid pace in the second
quarter.

Total consumer price inflation—as measured by the 12-month change in the PCE price index—was
estimated to have been 2.3 percent in May, based on the consumer and producer price indexes. Core
PCE price inflation, which excludes changes in consumer energy prices and many consumer food
prices, was 2.6 percent in May. Both total and core inflation were lower than at the beginning of the
year. Survey-based measures of short-term inflation expectations remained high, although the extent
of increases in recent months had varied considerably and some measures had declined somewhat in
May and June. Most survey-based measures of longer-term inflation expectations had held steady.

Recent data indicated that labor market conditions had remained solid. The unemployment rate was
4.2 percent in May, the same as in the previous two months. The labor force participation rate and
the employment-to-population ratio moved down in May but remained near their levels since the
beginning of the year. Total nonfarm payrolls increased at a solid pace in May, a little above the
average monthly rate over the previous four months. The ratio of job vacancies to unemployed job
seekers was unchanged at 1.0 in May. Average hourly earnings for all employees rose 3.9 percent
over the 12 months ending in May, a little lower than a year earlier.

Recent information suggested that real GDP was rising in the second quarter, after it had declined
slightly in the previous quarter. Real private domestic final purchases—which comprises PCE and
private fixed investment and which often provides a better signal than GDP of underlying economic
 Minutes of the Federal Open Market Committee 5

momentum—had increased solidly in the first quarter and appeared to be expanding further in the
second quarter. Indicators for consumer spending, such as retail sales and motor vehicle purchases
through May, pointed to solid PCE growth in the second quarter. Business fixed investment (BFI) rose
markedly in the first quarter, apparently boosted by a pull-forward of imported capital goods in
anticipation of tariff increases, and incoming data suggested that BFI was rising modestly in the
second quarter.

International trade flows continued to be volatile amid substantial shifts in U.S. tariffs. After surging in
the first quarter ahead of expected tariff hikes, U.S. imports—especially of consumer goods—declined
sharply in April. That decline suggested that the front-loading of imports had stopped after the
introduction of broad-based tariffs in early April. By contrast, U.S. exports firmed in April. In mid-May,
the U.S. and China agreed to a 90-day reduction in bilateral tariffs, and recent indicators suggested
that this change led to a rebound in trade flows.

Economic growth abroad picked up in the first quarter, lifted by the surge in shipments to the U.S.—
especially from Europe and Asia excluding China—in anticipation of tariff hikes. More recent indicators
pointed to a slowdown in foreign economic activity in the second quarter, partly reflecting lower
exports to the U.S. and the effects of elevated uncertainty about the course of global trade policies.

Inflation abroad remained near central bank targets in many foreign economies, although recent data
showed renewed inflationary pressures in some countries, notably in Mexico. By contrast, inflation in
China remained subdued.

Many foreign central banks eased policy during the intermeeting period, citing concerns about
economic growth and, in some cases, further progress on restoring price stability. In their
communications, foreign central banks continued to emphasize the need to maintain policy flexibility
amid substantial risks and uncertainty.

Staff Review of the Financial Situation

Despite a weakening of near-term inflation pressures, the market-implied path of the federal funds
rate over the next year increased over the intermeeting period with improvements in the economic
outlook amid a general easing in trade tensions. Near-term inflation compensation declined, while
longer-term inflation compensation was little changed. Nominal and real Treasury yields increased
moderately, on net, across the maturity spectrum.

Consistent with improving risk sentiment from recent trade developments, broad equity price indexes
increased markedly, and credit spreads tightened. Credit spreads narrowed to very low levels relative
to their historical distribution, except for the lowest-quality corporate bonds, which stood close to the
 6 June 17-18, 2025

median of their distribution. The VIX—a forward-looking measure of near-term equity market volatility—
declined moderately.

The reduction in trade policy tensions between the U.S. and China led to an improvement in global
economic growth prospects and lifted investor risk sentiment. The military conflict between Israel and
Iran left only a limited imprint outside of energy markets. On net, equity indexes and market-based
policy rate expectations increased in most major foreign economies. The dollar depreciated a bit
further.

Conditions in U.S. short-term funding markets remained stable. After increasing over the previous
intermeeting period because of incoming tax receipts, the TGA had resumed its decline in response to
actions associated with the ongoing federal debt limit situation. Average usage of the ON RRP facility
was little changed. Rates in secured markets were, on average, slightly below the effective federal
funds rate, likely reflecting low Treasury bill supply.

In domestic credit markets, borrowing costs for businesses, households, and municipalities mostly
edged down but remained elevated. Yields on both corporate bonds and leveraged loans declined
modestly. Interest rates on small business loans decreased in May. Yields on higher-rated tranches
of commercial mortgage-backed securities (CMBS) were little changed or increased slightly, whereas
yields on lower-rated CMBS tranches declined, notably so for non-agency securities. Rates on 30-year
fixed-rate conforming residential mortgages were little changed and remained elevated. Interest rates
on credit card offers ticked up in March and April, while rates on new auto loans were little changed in
May.

Financing through capital markets and nonbank lenders was readily accessible for public corporations
and large and middle-market private corporations. Issuance of nonfinancial corporate bonds and
leveraged loans, which slowed in April, was solid in May and early June, and private credit continued to
be broadly available in April and May. Regarding bank credit, commercial and industrial loan growth
picked up in April but moderated in May. Commercial real estate (CRE) loan growth was modest in
April and May.

Credit remained available for most households. In the residential mortgage market, credit continued
to be easily available for high-credit-score borrowers but was tighter for low-credit-score borrowers
despite easing slightly in May. Growth in consumer loan balances at banks was robust in April and
May.

Credit quality remained solid for large-to-midsize firms, municipalities, and most categories of
mortgages, but delinquency rates continued to be somewhat elevated in other sectors. The credit
performance of corporate bonds and leveraged loans remained stable in May. Delinquency rates on
 Minutes of the Federal Open Market Committee 7

small business loans in March and April stayed above pre-pandemic levels. In the CRE market, CMBS
delinquency rates remained elevated in May. Regarding household credit quality, the rate of serious
delinquencies on Federal Housing Administration mortgages remained above pre-pandemic levels in
April. By contrast, delinquency rates on most other mortgage loan types continued to stay near
historical lows. In the first quarter, credit card and auto loan delinquency rates remained at elevated
levels. Student loan delinquencies reported to credit bureaus shot up in the first quarter of the year
after the expiration of the on-ramp period for student loan payments and were expected to climb
further over the next few quarters. While delinquent student loan borrowers have not shown greater
difficulty in meeting other debt payments so far, debt collections on defaulted student loans later this
year could boost delinquency rates on other debt.

Staff Economic Outlook

The staff projection of real GDP growth for this year through 2027 was higher than the one prepared
for the May meeting, primarily because trade policy announcements led the staff to reduce their
assumptions about effective tariff rates relative to those in their previous forecast. With that improved
economic outlook, labor market conditions were not expected to weaken as much as in the previous
projection, though the unemployment rate was still forecast to rise somewhat through next year and to
run a little above the staff’s estimate of its natural rate through 2027.

The staff’s inflation projection was lower than the one prepared for the May meeting. Tariff increases
were expected to raise inflation this year and to provide a small boost in 2026. Inflation was projected
to decline to 2 percent by 2027.

The staff continued to view the uncertainty around their economic outlook as elevated, primarily
reflecting the uncertainty surrounding changes to trade, fiscal, immigration, and regulatory policies
and the associated economic effects. In addition to the baseline forecast, the staff had prepared a
number of alternative economic scenarios. The staff judged the risks around the projections of real
GDP growth and employment as still skewed to the downside, though they saw the risk of a recession
as less than at the time of their previous forecast. The staff continued to view the risks around the
inflation forecast as skewed to the upside, as the projected rise in inflation this year could be more
persistent than assumed in the baseline projection.

Participants’ Views on Current Conditions and the Economic Outlook

In conjunction with this FOMC meeting, participants submitted their projections of the most likely
outcomes for real GDP growth, the unemployment rate, and inflation for each year from 2025 through
2027 and over the longer run. The projections were based on participants’ individual assessments of
appropriate monetary policy, including their projections of the federal funds rate. The longer-run
 8 June 17-18, 2025

projections represented each participant’s assessment of the rate to which each variable would tend
to converge under appropriate monetary policy and in the absence of further shocks to the economy.
Participants also provided their individual assessments of the level of uncertainty and the balance of
risks associated with their projections. The SEP was released to the public after the meeting.

Participants noted that the available data showed that economic growth was solid and the
unemployment rate was low. Participants observed that inflation had come down but remained
somewhat elevated. Growth in consumer spending and business investment had been solid, though
many participants observed that measures of household and business sentiment remained weak.
Participants judged that uncertainty about the outlook was elevated amid evolving developments in
trade policy, other government policies, and geopolitical risks, but that overall uncertainty had
diminished since the previous meeting. Some participants commented that high uncertainty had the
potential to restrain economic activity, including private-sector hiring, in the near term. Participants
judged that there were downside risks to employment and economic activity and upside risks to
inflation, but that these risks had decreased as expectations about effective tariff rates and their
effects had declined from levels in April.

Participants observed that inflation had eased significantly since its peak in 2022 but remained
somewhat elevated relative to the Committee’s 2 percent longer-run goal. Participants noted that the
progress in returning inflation to target had continued even though that progress had been uneven.
Some participants observed that services price inflation had moved down recently, while goods price
inflation had risen. A few participants noted that there had been limited progress recently in reducing
core inflation. Some participants noted that geopolitical developments in the Middle East posed an
upside risk to energy prices.

In discussing their outlooks for inflation, participants noted that increased tariffs were likely to put
upward pressure on prices. There was considerable uncertainty, however, about the timing, size, and
duration of these effects. Many observed that it might take some time for the effect of higher tariffs to
be reflected in the prices of final goods because firms might choose not to raise prices on affected
goods and services until they had run down inventories of products imported before the increase in
tariffs or because it would take some time for tariffs on intermediate goods to work through the supply
chain. Several participants commented that upward pressure on prices could be greater if tariffs
disrupted supply chains or acted as a drag on productivity. Many participants noted that the eventual
effect of tariffs on inflation could be more limited if trade deals are reached soon, if firms are able to
quickly adjust their supply chains, or if firms can use other margins of adjustment to reduce their
exposure to the effects of tariffs. Several participants noted that firms not directly subject to tariffs
might take the opportunity to increase their prices if other prices rise, particularly those of
complementary products. Participants relayed a range of assessments from their business contacts
 Minutes of the Federal Open Market Committee 9

regarding the extent to which tariff-related cost increases would be passed on to consumers. Several
participants observed that the pass-through of tariffs might be limited if households and businesses
exhibit a low tolerance for price hikes or if firms seek to increase their market share as others raise
their prices. A few participants noted that the pass-through of tariff-related costs likely would be
greater for smaller businesses or businesses with narrow profit margins.

Participants noted that longer-term inflation expectations continued to be well anchored and that it
was important they remain so. Several participants commented that shorter-term inflation
expectations had been elevated and that this development had the potential to spill over into longer-
term expectations or to affect price and wage setting in the near term. While a few participants noted
that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation
expectations, most participants noted the risk that tariffs could have more persistent effects on
inflation, and some highlighted the fact that such persistence could also affect inflation expectations.
Some participants observed that because inflation has been elevated for some time, there was a
heightened risk of longer-term inflation expectations becoming unanchored if there is a long-lasting
rise in inflation.

In their discussion of the labor market, participants judged that conditions remained solid and that the
labor market was at, or near, estimates of maximum employment. Several participants observed that
the recent stability of the labor market reflected a slowing in both hiring and layoffs, and several
participants also mentioned that their contacts and business survey respondents reported pausing
hiring decisions because of elevated uncertainty. Several participants noted that immigration policies
were reducing labor supply. In their outlook for the labor market, most participants suggested that
higher tariffs or heightened policy uncertainty would weigh on labor demand, and many participants
expected a gradual softening of conditions. A few participants noted that some indicators already
provided signs of softness and that they would be attentive to indications of further labor market
weakening. Some participants observed that wage growth had continued to moderate and that it was
not expected to contribute to inflationary pressures.

Participants judged that economic activity had continued to grow at a solid pace, although uncertainty
remained elevated. The outlook was for continued economic growth, although a majority of
participants expected that the pace of growth was likely to moderate going forward. Regarding the
household sector, several participants observed that some recent data indicated continued solid
consumer spending growth, whereas several other participants pointed to other data that suggested
softening. Several participants noted that lower- and moderate-income households were switching to
lower-cost items and brands or that these households could be disproportionately affected by tariff-
related price increases. Many participants observed that measures of household sentiment remained
 10 June 17-18, 2025

low, although these measures had risen a bit recently. A few participants noted that consumer
sentiment had not been a good predictor of consumer spending in recent years.

In their discussion of the business sector, participants noted that activity remained solid, although
there have been signs of softening, and many observed that indicators of business sentiment
remained low. With respect to investment spending, several participants reported that business
contacts had indicated that their firms were proceeding with existing investment projects but that
heightened uncertainty was making them cautious about beginning new projects, especially larger
ones; some smaller new investments or those with more certain payoffs were still being undertaken.
Several participants noted that financing from both banks and financial markets was readily available
for larger investment projects. A couple of participants noted that business investment in artificial
intelligence could boost productivity. Several participants commented that there had been signs of
softening production activity in the manufacturing sector and pointed to reductions in orders and
shipments in manufacturing surveys or in reports of business contacts. A couple of participants noted
that the agricultural sector faced strains from low crop prices and high input costs.

In their consideration of monetary policy at this meeting, participants noted that inflation remained
somewhat elevated. Participants also observed that recent indicators suggested that economic
activity had continued to expand at a solid pace, although swings in net exports and inventories had
affected the measurement and interpretation of the data. Participants further noted that the
unemployment rate remained at a low level and that labor market conditions had remained solid.
Participants observed that uncertainty about the economic outlook had diminished amid a reduction
in announced and expected tariffs, which appeared to peak in April and had subsequently declined,
but that overall uncertainty continued to be elevated. All participants viewed it as appropriate to
maintain the target range for the federal funds rate at 4¼ to 4½ percent. Participants judged it
appropriate to continue the process of reducing the Federal Reserve’s securities holdings.

In considering the outlook for monetary policy, participants generally agreed that, with economic
growth and the labor market still solid and current monetary policy moderately or modestly restrictive,
the Committee was well positioned to wait for more clarity on the outlook for inflation and economic
activity. Participants noted that monetary policy would be informed by a wide range of incoming data,
the economic outlook, and the balance of risks. Most participants assessed that some reduction in
the target range for the federal funds rate this year would likely be appropriate, noting that upward
pressure on inflation from tariffs may be temporary or modest, that medium- and longer-term inflation
expectations had remained well anchored, or that some weakening of economic activity and labor
market conditions could occur. A couple of participants noted that, if the data evolve in line with their
expectations, they would be open to considering a reduction in the target range for the policy rate as
soon as at the next meeting. Some participants saw the most likely appropriate path of monetary
 Minutes of the Federal Open Market Committee 11

policy as involving no reductions in the target range for the federal funds rate this year, noting that
recent inflation readings had continued to exceed the Committee’s 2 percent goal, that upside risks to
inflation remained meaningful in light of factors such as elevated short-term inflation expectations of
businesses and households, or that they expected that the economy would remain resilient. Several
participants commented that the current target range for the federal funds rate may not be far above
its neutral level.

Various participants discussed risks that, if realized, would have the potential to affect the appropriate
path of monetary policy. Regarding upside risks to inflation, participants noted that, if the imposition
of tariffs were to generate a larger-than-expected increase in inflation, if such an increase in inflation
were to be more persistent than anticipated, or if a notable increase in medium- or longer-term
inflation expectations were to occur, then it would be appropriate to maintain a more restrictive stance
of monetary policy than would otherwise be the case, especially if labor market conditions and
economic activity remained solid. By contrast, if labor market conditions or economic activity were to
weaken materially, or if inflation were to continue to come down and inflation expectations remained
well anchored, then it would be appropriate to establish a less restrictive stance of monetary policy
than would otherwise be the case. Participants noted that the Committee might face difficult tradeoffs
if elevated inflation proved to be more persistent while the outlook for employment weakened. If that
were to occur, participants agreed that they would consider how far the economy is from each goal
and the potentially different time horizons over which those respective gaps would be anticipated to
close.

In considering the likelihood of various scenarios, participants agreed that the risks of higher inflation
and weaker labor market conditions had diminished but remained elevated, citing a lower expected
path of tariffs, encouraging recent readings on inflation and inflation expectations, resilience in
consumer and business spending, or improvements in some measures of consumer or business
sentiment. Some participants commented that they saw the risk of elevated inflation as remaining
more prominent, or as having diminished by less, than risks to employment. A few participants saw
risks to the labor market as having become predominant. They noted some recent signs of weakening
in real activity or the labor market, or commented that conditions could weaken in the future,
particularly if policy were to remain restrictive. Participants agreed that although uncertainty about
inflation and the economic outlook had decreased, it remained appropriate to take a careful approach
in adjusting monetary policy. Participants emphasized the importance of ensuring that longer-term
inflation expectations remained well anchored and agreed that the current stance of monetary policy
positioned the Committee well to respond in a timely way to potential economic developments.
 12 June 17-18, 2025

Committee Policy Actions

In their discussions of monetary policy for this meeting, members agreed that although swings in net
exports had affected the data, recent indicators suggested that economic activity had continued to
expand at a solid pace. Members agreed that the unemployment rate had remained at a low level and
that labor market conditions had remained solid. Members concurred that inflation remained
somewhat elevated. Members agreed that it was appropriate to acknowledge in the postmeeting
statement that uncertainty about the economic outlook had diminished but remained elevated, and
the Committee was attentive to the risks to both sides of its dual mandate. The assessment that
uncertainty had declined reflected, in part, a reduction in the expected level of tariffs, which appeared
to peak in April and had subsequently declined.

In support of its goals, the Committee agreed to maintain the target range for the federal funds rate at
4¼ to 4½ percent. Members agreed that, in considering the extent and timing of additional
adjustments to the target range for the federal funds rate, the Committee would carefully assess
incoming data, the evolving outlook, and the balance of risks. All members agreed that the
postmeeting statement should affirm their strong commitment both to supporting maximum
employment and to returning inflation to the Committee’s 2 percent objective.

Members agreed that, in assessing the appropriate stance of monetary policy, the Committee would
continue to monitor the implications of incoming information for the economic outlook. They would be
prepared to adjust the stance of monetary policy as appropriate if risks emerged that could impede
the attainment of the Committee’s goals. Members also agreed that their assessments would take
into account a wide range of information, including readings on labor market conditions, inflation
pressures and inflation expectations, and financial and international developments.

At the conclusion of the discussion, the Committee voted to direct the Federal Reserve Bank of New
York, until instructed otherwise, to execute transactions in the SOMA in accordance with the following
domestic policy directive, for release at 2:00 p.m.:

“Effective June 20, 2025, the Federal Open Market Committee directs the Desk to:

• Undertake open market operations as necessary to maintain the federal funds rate in a
target range of 4¼ to 4½ percent.

• Conduct standing overnight repurchase agreement operations with a minimum bid rate of
4.5 percent and with an aggregate operation limit of $500 billion.

• Conduct standing overnight reverse repurchase agreement operations at an offering rate

of 4.25 percent and with a per-counterparty limit of $160 billion per day.
 Minutes of the Federal Open Market Committee 13

• Roll over at auction the amount of principal payments from the Federal Reserve’s
holdings of Treasury securities maturing in each calendar month that exceeds a cap of
$5 billion per month. Redeem Treasury coupon securities up to this monthly cap and
Treasury bills to the extent that coupon principal payments are less than the monthly cap.

• Reinvest the amount of principal payments from the Federal Reserve’s holdings of
agency debt and agency mortgage-backed securities (MBS) received in each calendar
month that exceeds a cap of $35 billion per month into Treasury securities to roughly
match the maturity composition of Treasury securities outstanding.

• Allow modest deviations from stated amounts for reinvestments, if needed for
operational reasons.”

The vote also encompassed approval of the statement below for release at 2:00 p.m.:

“Although swings in net exports have affected the data, recent indicators suggest that
economic activity has continued to expand at a solid pace. The unemployment rate remains
low, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent
over the longer run. Uncertainty about the economic outlook has diminished but remains
elevated. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal
funds rate at 4¼ to 4½ percent. In considering the extent and timing of additional
adjustments to the target range for the federal funds rate, the Committee will carefully assess
incoming data, the evolving outlook, and the balance of risks. The Committee will continue
reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed
securities. The Committee is strongly committed to supporting maximum employment and
returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to
monitor the implications of incoming information for the economic outlook. The Committee
would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that
could impede the attainment of the Committee’s goals. The Committee’s assessments will
take into account a wide range of information, including readings on labor market conditions,
inflation pressures and inflation expectations, and financial and international developments.”
 14 June 17-18, 2025

Voting for this action: Jerome H. Powell, John C. Williams, Michael S. Barr, Michelle W. Bowman,
Susan M. Collins, Lisa D. Cook, Austan D. Goolsbee, Philip N. Jefferson, Adriana D. Kugler, Alberto G.
Musalem, Jeffrey R. Schmid, and Christopher J. Waller.

Voting against this action: None.

Consistent with the Committee’s decision to leave the target range for the federal funds rate
unchanged, the Board of Governors of the Federal Reserve System voted unanimously to maintain the
interest rate paid on reserve balances at 4.4 percent, effective June 20, 2025. The Board of
Governors of the Federal Reserve System voted unanimously to approve the establishment of the
primary credit rate at the existing level of 4.5 percent.

It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday, July 29–
30, 2025. The meeting adjourned at 10:10 a.m. on June 18, 2025.

Notation Vote
By notation vote completed on May 27, 2025, the Committee unanimously approved the minutes of
the Committee meeting held on May 6–7, 2025.

Attendance
Jerome H. Powell, Chair
John C. Williams, Vice Chair
Michael S. Barr
Michelle W. Bowman
Susan M. Collins
Lisa D. Cook
Austan D. Goolsbee
Philip N. Jefferson
Adriana D. Kugler
Alberto G. Musalem
Jeffrey R. Schmid
Christopher J. Waller
Beth M. Hammack, Patrick Harker, Neel Kashkari, and Lorie K. Logan, Alternate Members of the
Committee
Thomas I. Barkin, Raphael W. Bostic, and Mary C. Daly, Presidents of the Federal Reserve Banks of
Richmond, Atlanta, and San Francisco, respectively
Joshua Gallin, Secretary
Matthew M. Luecke, Deputy Secretary
Brian J. Bonis, Assistant Secretary
Michelle A. Smith, Assistant Secretary
Mark E. Van Der Weide, General Counsel
Richard Ostrander, Deputy General Counsel
Trevor A. Reeve, Economist
Stacey Tevlin, Economist
Beth Anne Wilson, Economist
 Minutes of the Federal Open Market Committee 15

Shaghil Ahmed, Brian M. Doyle, Eric M. Engen, Joseph W. Gruber, Anna Paulson, and Egon Zakrajšek,
Associate Economists
Roberto Perli, Manager, System Open Market Account
Julie Ann Remache, Deputy Manager, System Open Market Account
Jose Acosta, Senior System Engineer II, Division of Information Technology, Board
Sriya Anbil, Group Manager, Division of Monetary Affairs, Board
Philippe Andrade, 2 Vice President, Federal Reserve Bank of Boston
Roc Armenter, Executive Vice President, Federal Reserve Bank of Philadelphia
Alyssa Arute, 3 Assistant Director, Division of Reserve Bank Operations and Payment Systems, Board
Ayelen Banegas, Principal Economist, Division of Monetary Affairs, Board
Becky C. Bareford, First Vice President, Federal Reserve Bank of Richmond
Lisa Barrow, Vice President, Federal Reserve Bank of Cleveland
William F. Bassett, Senior Associate Director, Division of Financial Stability, Board
Michael Bauer,2 Senior Research Advisor, Federal Reserve Bank of San Francisco
Travis J. Berge,2 Section Chief, Division of Research and Statistics, Board
Dario Caldara,2 Adviser, Division of International Finance, Board
Mark A. Carlson, Adviser, Division of Monetary Affairs, Board
Michele Cavallo, Special Adviser to the Board, Division of Board Members, Board
Wendy E. Dunn, Adviser, Division of Research and Statistics, Board
William Dupor, Senior Economic Policy Advisor II, Federal Reserve Bank of St. Louis
Eric C. Engstrom, Associate Director, Division of Monetary Affairs, Board
Giovanni Favara,2 Deputy Associate Director, Division of Monetary Affairs, Board
Laura J. Feiveson, Special Adviser to the Board, Division of Board Members, Board
Giuseppe Fiori,2 Principal Economist, Division of International Finance, Board
Jonas Fisher,2 Senior Vice President, Federal Reserve Bank of Chicago
Glenn Follette, Associate Director, Division of Research and Statistics, Board
Etienne Gagnon, Senior Associate Director, Division of International Finance, Board
Vaishali Garga,2 Principal Economist, Federal Reserve Bank of Boston
Michael S. Gibson, Director, Division of Supervision and Regulation, Board
Jonathan E. Goldberg, Principal Economist, Division of Monetary Affairs, Board
François Gourio, Senior Economist and Economic Advisor, Federal Reserve Bank of Chicago

2 Attended through the discussion of the review of the monetary policy framework.
3 Attended through the discussion of developments in financial markets and open market operations.
 16 June 17-18, 2025

Christopher J. Gust, Associate Director, Division of Monetary Affairs, Board

François Henriquez, First Vice President, Federal Reserve Bank of St. Louis
Edward Herbst,2 Section Chief, Division of Monetary Affairs, Board
Valerie S. Hinojosa, Section Chief, Division of Monetary Affairs, Board
Sara J. Hogan,3 Senior Financial Institution Policy Analyst I, Division of Reserve Bank Operations and
Payment Systems, Board
Jane E. Ihrig, Special Adviser to the Board, Division of Board Members, Board
Benjamin K. Johannsen,2 Assistant Director, Division of Monetary Affairs, Board
Michael T. Kiley, Deputy Director, Division of Monetary Affairs, Board
Don H. Kim, Senior Adviser, Division of Monetary Affairs, Board
Elizabeth Klee, Deputy Director, Division of Monetary Affairs, Board
Scott R. Konzem, Senior Economic Modeler II, Division of Monetary Affairs, Board
Michael Koslow,3 Associate Director, Federal Reserve Bank of New York
Spencer D. Krane,2 Senior Vice President, Federal Reserve Bank of Chicago
Sylvain Leduc, Executive Vice President and Director of Economic Research, Federal Reserve Bank of
San Francisco
Andreas Lehnert, Director, Division of Financial Stability, Board
Paul Lengermann, Deputy Associate Director, Division of Research and Statistics, Board
Eric LeSueur,3 Policy and Market Analysis Advisor, Federal Reserve Bank of New York
Kurt F. Lewis, Special Adviser to the Chair, Division of Board Members, Board
Logan T. Lewis, Section Chief, Division of International Finance, Board
Laura Lipscomb, Special Adviser to the Board, Division of Board Members, Board
Francesca Loria,2 Principal Economist, Division of Monetary Affairs, Board
David López-Salido, Senior Associate Director, Division of Monetary Affairs, Board
Jonathan P. McCarthy, Economic Research Advisor, Federal Reserve Bank of New York
Benjamin W. McDonough, Deputy Secretary and Ombudsman, Office of the Secretary, Board
Alisdair G. McKay,2 Monetary Advisor, Federal Reserve Bank of Minneapolis
Yvette McKnight,2 Senior Agenda Assistant, Office of the Secretary, Board
Mark Meder, First Vice President, Federal Reserve Bank of Cleveland
Ann E. Misback, Secretary, Office of the Secretary, Board
David Na, Lead Financial Institution Policy Analyst, Division of Monetary Affairs, Board
Edward Nelson, Senior Adviser, Division of Monetary Affairs, Board
Giovanni Nicolò,2 Principal Economist, Division of Monetary Affairs, Board
Anna Nordstrom, Head of Markets, Federal Reserve Bank of New York
 Minutes of the Federal Open Market Committee 17

Alyssa T. O’Connor, Special Adviser to the Board, Division of Board Members, Board
Michael G. Palumbo, Senior Associate Director, Division of Research and Statistics, Board
Matthias Paustian,2 Assistant Director, Division of Research and Statistics, Board
Karen M. Pence, Deputy Associate Director, Division of Research and Statistics, Board
Paolo A. Pesenti, 4 Director of Monetary Policy Research, Federal Reserve Bank of New York
Eugenio P. Pinto, Special Adviser to the Board, Division of Board Members, Board
Andrea Raffo, Senior Vice President, Federal Reserve Bank of Minneapolis
Samuel Schulhofer-Wohl, Senior Vice President, Federal Reserve Bank of Dallas
Kirk Schwarzbach, Special Assistant to the Board, Division of Board Members, Board
Zeynep Senyuz, Special Adviser to the Board, Division of Board Members, Board
Andre F. Silva, Principal Economist, Division of Monetary Affairs, Board
Thiago Teixeira Ferreira, Special Adviser to the Board, Division of Board Members, Board
Judit Temesvary, Principal Economist, Division of International Finance, Board
Paula Tkac, Director of Research, Federal Reserve Bank of Atlanta
Robert L. Triplett III, First Vice President, Federal Reserve Bank of Dallas
Daniel J. Vine, Principal Economist, Division of Research and Statistics, Board
Donielle A. Winford, Senior Information Manager, Division of Monetary Affairs, Board
Alexander L. Wolman, Vice President, Federal Reserve Bank of Richmond
Rebecca Zarutskie,2 Senior Vice President, Federal Reserve Bank of Dallas
Molin Zhong,2 Principal Economist, Division of Financial Stability, Board

_______________________
Joshua Gallin
Secretary

4 Attended through the discussion of economic developments and the outlook.