The Fed report

highlights from The FOMC Policy Update
JUNE 20, 2025

This week, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its June meeting.

FOMC Policy Updates: Key Highlights

  • The FOMC maintained the target range for the federal funds rate at 4.25-4.50% in a unanimous decision at its fifth meeting of 2025.
  • The updated dot plot of rate projections shows a median expectation of two quarter-point rate cuts in 2025, consistent with market expectations, and one quarter-point rate cut in each of 2026 and 2027.
  • The FOMC maintained the pace of reduction of its holdings of Treasury Securities ($5 billion per month cap) and agency debt and mortgage-backed securities ($35 billion per month cap).

notable commentary

  • The Fed’s updated economic forecast included an increased inflation estimate at year end 2025 (from 2.7% in the prior quarter to 3.0%) and a reduction in the economic growth forecast for 2025 (from 1.7% to 1.4%), providing a challenging macroeconomic backdrop for the Fed’s monetary policy actions.
  • Although inflation has declined significantly from recent highs, Chair Powell noted that it remains elevated relative to the 2% long-term goal and subject to considerable uncertainty related to the administration’s trade policy and tariffs.
  • With respect to the Fed’s maximum employment mandate, Chair Powell remarked that “a wide range of indicators suggests that conditions in the labor market are broadly in balance and consistent with maximum employment.”
  • Consistent with prior meetings, Chair Powell said the FOMC will continue to review incoming data as it evaluates potential changes to the current policy stance, which he characterized as “modestly restrictive.”

Important Disclosures
This report includes the thoughts and opinions of AGNC Investment Corp. (“AGNC”) and is being shared for informational purposes only and should not be construed as investment advice. Neither the Federal Reserve nor any other third party has contributed to or been involved in AGNC’s preparation of these materials. AGNC does not endorse or adopt the views of the Federal Reserve or any third party.

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