The Fed report

highlights from The FOMC Policy Update
MAY 8, 2025

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

FOMC Policy Updates: Key Highlights

As generally expected, the FOMC maintained the target range for the federal funds rate at 4.25-4.50% in a unanimous decision at its third meeting of 2025.
The Fed’s policy statement noted that “the risks of higher unemployment and higher inflation have risen” as uncertainty about the economic outlook has “increased further” since its March meeting.
The market is currently pricing in three 25 bps rate cuts through the end of the year, and the next Summary of Economic Projections is expected to be released following the Fed’s June meeting.

notable commentary

Despite increased near-term inflationary pressures, including the significantly larger than anticipated tariffs announced in April, Chair Powell emphasized that long-term expectations currently remain consistent with the Fed’s 2% inflation goal.
As the administration continues to implement substantial changes to trade, immigration, fiscal, and regulatory policy, Chair Powell reiterated that the Fed intends to maintain its wait-and-see approach to monetary policy, assessing incoming economic data and the balance of risks as economic conditions evolve.
Throughout the press conference, Chair Powell continued to reinforce that, though the economic backdrop has become increasingly uncertain, the Fed believes it is well-positioned to respond quickly to potential economic developments.

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.

Investment in AGNC involves risks and uncertainties that may cause future performance to vary from historical results or any forward-looking commentary provided. Please refer to our annual and quarterly reports on file with the SEC and available on our website or at www.sec.gov for more information about AGNC, including material risks, other factors that may affect future performance, and notices regarding forward-looking statements. AGNC disclaims any obligation to update or revise any forward-looking commentary. Stockholders and other interested parties may sign up to receive AGNC’s news, perspectives, and other types of email alerts by clicking the Subscribe link below.