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The Federal Reserve held interest rates steady at its June meeting, as expected, while reaffirming the possibility of two rate cuts later this year.
It was a relatively predictable meeting, with the main updates coming from slight revisions to the Fed's forecasts for GDP, unemployment, and inflation. Markets had little reaction to the news.
"Blah FOMC," Stuart Kaiser, head of US equity trading strategy at Citi, said in a note to clients. "The FOMC delivered a non-event."
Outside of the policy decision, the Fed’s latest "dot plot" revealed a central bank more divided than it was back in March.
Read more: The Fed’s dot plot explained
Eight policymakers anticipate two rate cuts by the end of 2025, possibly a reflection of the slower growth and higher unemployment expected later this year, while seven expect no cuts as the Fed continues to wrestle with inflation amid tariffs and other policy uncertainties.
But Federal Reserve Chair Jerome Powell downplayed the predictive power of the dots, cautioning against reading too much into the projections.
"People can look at the same data and evaluate the risks differently," he said during the post-decision press conference. "As we see more data, we're going to learn more about where inflation is headed. And that means when it is time to [resume] our normalization process, the differences you may see should be smaller because we'll have seen actual data."
"Right now," he added, "It's just a forecast in a very foggy time.”
JPMorgan economist Michael Feroli echoed Powell’s skepticism, telling clients in a note, "We continue to look for only one cut this year, at the December meeting."
"While this is fewer cuts than the median participant expects, we are putting into practice Powell’s advice to not take too much signal from the dots," he wrote.
That "fogginess" Powell alluded to has only been exacerbated by escalating tensions in the Middle East, ongoing trade developments, and other geopolitical risks, factors that continue to cloud the economic outlook and keep markets cautious.
"There's so much information that is still unknown," Leslie Falconio, head of taxable fixed income strategy at UBS Global Wealth Management, told Yahoo Finance. "I'm not surprised, number one, that they held steady or that they actually kept the two cuts priced in."
That sense of cautious resignation was echoed by others on Wall Street.
"We did pay attention to what the FOMC did today," Rick Rieder, chief investment officer of global fixed income at BlackRock, wrote in a client note. "Some of it mattered and some just took up space in the grand scheme of things."
